Big banks are feasting on war and the AI buildout

Wall Street's banks are feasting, according to earnings reports released this week from giants Goldman Sachs $GS and JPMorgan $JPM — and no wonder. The business world’s two biggest factors are working out in their favor. First, there’s the ongoing mega-capital story surrounding the AI buildout, which has public and private companies borrowing as never before. Even the war is working in banks’ favor, creating the volatility that keeps their trading desks busy.

In short, 2026 is proving a good year for big banks, at least thus far. A look beneath the hood reveals how both AI and the war are functioning as tailwinds.

AI borrowing and war-born volatility make for big business

For the quarter, JPMorgan reported net income of $16.5 billion, up 13% year over year, with markets revenue hitting a record of nearly $12 billion. Fixed income trading was up 21%, driven by strong client activity in commodities, credit, and currencies — exactly the categories that move when oil shocks and “geopolitical volatility” send institutional investors scrambling to hedge. Goldman's fixed income results were more mixed, but equities surged 27% and investment banking fees jumped 48%, driven by advisory activity and a sharp increase in completed mergers and acquisitions.

The AI buildout is showing up in a different part of the income statement. Goldman specifically called out "higher net revenues from investment-grade and asset-backed activity" in debt underwriting — the precise category where the historic wave of hyperscaler bond issuances lands. As one example, Goldman led Oracle $ORCL's $25 billion bond offering in February, one of the largest corporate bond sales in recent memory.

That deal alone generated substantial underwriting fees — and it's one of dozens in a wave that JPMorgan's Jamie Dimon explicitly named as a macroeconomic bonanza for banks, listing "AI-driven capital investment" alongside fiscal stimulus and deregulation. The larger earnings release specifically cited "continued strength in Securitized Products" in the bank’s fixed-income results, which is where asset-backed data center financing structures generate trading revenue.

Profiting at virtually every level

All in all, it’s a picture of banks benefiting from the AI buildout at basically every level, and simultaneously — arranging the debt, trading the bonds, advising on the deals, and cheerleading the macro story. Whether the music ever stops is another question, and to what extent ordinary investors may be carrying some of the risk inside their own far more modest portfolios is yet another.

Whether it’s AI or it’s war (which is itself an AI play of sorts, benefitting the Palantirs of the world), there’s a profit angle that someone is playing. All the way, it seems, to the bank.