Goldman Sachs, JPMorgan and Morgan Stanley Lead AI Stock Trading Haul with $52 Billion
Wall Street's top three firms capture nearly 80% of equities trading revenue among major banks amid surging hedge fund leverage.
At a glance
- Goldman Sachs, JPMorgan, and Morgan Stanley posted $52 billion in equities revenue through September, near 80% of the top five banks' total.
- Lending via prime brokerage units drove the surge as hedge funds leveraged bets on AI hardware, cloud firms, and Asian chipmakers.
- Regulators eased bank leverage rules in 2025, even as the IMF raised caution over hedge fund debt reaching $13 trillion globally.
Wall Street's three biggest investment banks—Goldman Sachs, JPMorgan Chase, and Morgan Stanley—generated a combined $52 billion in equities trading revenue through September 30, capturing nearly 80% of the market among the top five firms. Filings reveal that the five largest investment banks generated roughly $67 billion in equities revenue over the first nine months of the year, surpassing the previous record of $60 billion set across all of 2025.
The revenue surge is being powered by the global investment wave in artificial intelligence stocks, relaxed balance-sheet rules, and increased lending to hedge funds seeking to leverage their trades. Through their prime brokerage divisions, the three major firms have extended substantial financing to funds wagering on semiconductor manufacturers, hyperscalers, and AI hardware developers.
Growth in Prime Brokerage Financing
Prime brokerage units, which offer hedge funds margin loans and securities lending, have evolved into stable, high-margin revenue drivers. At Goldman Sachs, equities financing revenue spiked 96% during the third quarter to reach a record $3.37 billion. While JPMorgan and Morgan Stanley do not separately disclose those exact financing figures, executives at both firms reported seeing comparable demand.
The performance has broadened the gap between the dominant three firms and competitors such as Bank of America and Citigroup. Major deals, such as leveraged swaps on volatile tech stocks, require massive balance sheets capable of handling potential $100 million single-trade losses without disrupting quarterly earnings. The Big Three have also expanded their market share following the retreat of European lenders like Credit Suisse.
International demand has further accelerated trading. Trading desks identified Asia as the fastest-growing equities market, with institutional capital pouring into chip and hardware supply-chain companies in South Korea and Taiwan.
Regulatory Relief and Leverage Risks
Bank activity has also been supported by regulatory changes finalized in 2025 under the Trump administration. Regulators eased balance-sheet constraints by softening leverage rules on collateralized assets such as prime brokerage loans and Treasurys, freeing up capital for large-scale financing.
However, expanding debt has prompted warnings from global institutions. The International Monetary Fund reported this month that global hedge fund assets reached $13 trillion, cautioning that crowded trades and rising leverage could create financial stability risks. While JPMorgan chief executive Jamie Dimon previously noted that industrywide leverage was at an all-time high, bank leaders maintain that collateral requirements, strict margin calls, and routine stress tests insulate lenders from market shocks.
Source: CNBC Top News.
Questions and answers
- How much equities trading revenue did top Wall Street banks generate?
- The five largest investment banks brought in about $67 billion in equities revenue through September 30, with Goldman Sachs, JPMorgan, and Morgan Stanley accounting for $52 billion of that total.
- Why are hedge funds borrowing more from prime brokerages?
- Hedge funds are using leverage to amplify trades on artificial intelligence stocks, including semiconductor manufacturers, cloud computing giants, and data center supply chains.
- What regulatory changes helped boost bank trading revenue?
- Rules revised under the Trump administration and finalized in 2025 eased stringent balance-sheet caps on collateralized assets like prime loans and Treasurys, allowing banks to deploy more capital.
