The investment banking division of TD Bank predicts that JPMorgan’s market capitalization will reach $1 trillion with the help of artificial intelligence (AI) technology.
During a recent interview on CNBC, TD Cowen bank analyst Steven Alexopoulos highlighted that investors are currently favoring tech stocks to capitalize on the potential growth driven by AI.
Alexopoulos pointed out that investors may not have enough exposure to stocks that are poised to benefit from the widespread adoption of AI for commercial purposes.
“As AI technology advances, we will see a shift from focusing on the builders like Nvidia and OpenAI to companies utilizing this technology to create significant economic value.
Similar to the evolution of the internet, where initially companies like Cisco and IBM led the way, and later Google and Amazon emerged dominant. Sectors with a heavy reliance on knowledge workers will be disrupted by AI.”
The analyst believes that banks, particularly JPMorgan, will greatly benefit from the progress in AI technology.
Alexopoulos anticipates a significant reduction in JPMorgan’s workforce, with the head of consumer banking projecting a 10% decrease over the next five years. Alexopoulos, however, expects a more substantial 20% reduction, with JPMorgan’s growth trajectory remaining strong despite the decrease in staff.
“JPMorgan’s current valuation does not fully account for the transformative impact of AI technology. Banks are likely to see a shift in their valuation metrics. By the end of next year, JPMorgan could reach a trillion-dollar market cap.”
As of the latest market close, JPMorgan’s market cap is at $811 billion.
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