Goldman, JPMorgan and Morgan Stanley Book $52 Billion in Equities Revenue Through September, Nearly 80% of the Big Five's Total

Wall Street's equities desks have already beaten last year's record, with one quarter still to go.

The five biggest investment banks generated about $67 billion in equities revenue through Sept. 30, according to company filings. That is $7 billion more than the group made in all of 2025, itself a record year.

Three firms took most of it. Goldman Sachs, JPMorgan Chase and Morgan Stanley booked a combined $52 billion, nearly 80% of the total.

Hedge fund leverage is the engine

The growth is not just from clients buying and selling shares. A large share comes from prime brokerage, the business of lending hedge funds money, lending them securities and handling their trades so they can place bigger bets.

Goldman's equities financing revenue jumped 96% in the third quarter to a record $3.37 billion. JPMorgan and Morgan Stanley do not break out that line, but both said they saw similar demand.

Bank executives said last week that demand for leverage to bet on AI hardware, hyperscalers and chip suppliers has reached new highs. JPMorgan CFO Jeremy Barnum agreed with an analyst's description of an "insatiable demand for capital" on the bank's third-quarter call. "There is capital being tapped through all kinds of different mechanisms," he said.

Wells Fargo banking analyst Mike Mayo told CNBC the Big Three treat each other as their main competition for what he called the "AI mega trade." "They've been best positioned to take advantage of this market," he said.

Why the gap is widening

The gap between the leaders and Bank of America and Citigroup is growing. Trading executives told CNBC the largest banks can absorb a potential $100 million loss on a multibillion-dollar leveraged trade without hurting quarterly results. Smaller or specialized banks cannot take comparable risk on single trades, so they pass on business or give up share.

Bloomberg Intelligence analyst Herman Chan said U.S. prime brokerages have also gained as European banks, including Credit Suisse, retreated from equities. In his view, scale draws hedge funds because bigger equities businesses offer more counterparties to trade against.

Rachid Alaoui, JPMorgan's global head of equities, said clients value consistent coverage across products and regions, especially in volatile markets.

Geography matters too. Trading executives said Asia was the fastest-growing equities opportunity this year. Alaoui said institutions invested heavily in South Korea and Taiwan, targeting memory chipmakers and semiconductor manufacturers that supply data center construction. The Big Three's operations in Tokyo, Hong Kong, Seoul and Mumbai gave them an edge there.

CNBC attributes the broader boom to the AI stock rally, relaxed capital rules and expanded hedge fund lending. Wall Street executives say the financing work has turned the Big Three's equity desks from cyclical, transactional businesses into steadier, higher-margin lending operations.

The other side of the trade

The same market has been shaky. The Nasdaq fell 4.5% in a recent week, with semiconductor stocks leading the decline, according to InvestorPlace's Market 360 column, which said investors remain worried about how long the AI trade can last. Its list of concerns: the enormous sums tech companies are spending on AI, rising interest rates and a recent inflation reading.

Those are the conditions that put lenders to leveraged funds in the spotlight. A prime broker earns fees and interest when clients borrow to buy rising stocks. It carries the exposure if those positions go bad.

The broader economy is also running hot on investment. The Atlanta Fed estimates third-quarter U.S. GDP growth at 3.6%, with about 44% of that coming from business investment. Fed Chairman Kevin Warsh said AI is at the center of the investment boom but that it is broadening out, and called it a source of "strength and durability." Epoch Times reported that heavy investment is also pushing interest rates higher because of competition for capital.

JPMorgan said on Oct. 19 it has deployed about $230 billion toward U.S. defense, energy, manufacturing and supply chain companies under its $1.5 trillion Security and Resiliency Initiative, launched in October 2025. That includes $5 billion in equity investments. CEO Jamie Dimon said the effort combines funding, research and policy insight to reinforce American economic resilience.

What to watch

The fourth-quarter figures will show whether the $67 billion pace holds. Goldman's record financing line is the clearest gauge of how much borrowed money is chasing AI shares, and executives at the three banks have given no sign of demand easing.

The open question is what happens to those leveraged positions if the tech sell-off deepens. No bank has disclosed how much of its equities financing is tied to AI-linked names, and JPMorgan and Morgan Stanley do not report the line at all.