Investment banks benefit from market volatility, technology upgrades, but may face challenges in underwriting

From Nasdaq.: 2025-04-08 08:22:00

The Zacks Investment Bank industry is poised to benefit from increased trading income due to market volatility and client activity amid economic uncertainty. Investments in AI and technology are expected to boost long-term efficiency. However, underwriting and advisory businesses may face challenges, limiting revenue growth. Industry leaders include IBKR, HOOD, and BGC.

Major themes influencing the Investment Bank industry include solid trading business, technology-driven efficiency improvements, and challenges in underwriting and advisory businesses due to economic ambiguity. The industry ranks in the top 29% of Zacks industries, with a strong earnings outlook and positive stock performance.

Interactive Brokers (IBKR), with a market cap of $61.7 billion, continues to focus on innovative products and global expansion. Robinhood (HOOD), valued at $30.6 billion, expects transaction-based revenues to improve with increased retail participation. BGC Group (BGC), with a market cap of $3.7 billion, is positioned for growth in energy and commodities brokerage.

IBKR, HOOD, and BGC are recommended investment banks to consider. IBKR focuses on automation and global expansion, while HOOD aims to democratize finance and diversify its product base. BGC Group is expected to benefit from acquisitions and growth in the energy sector. Shares of these companies have shown positive performance.

Zacks Investment Research offers a $1 trial to access all stock picks. Thousands have taken advantage of this offer, which includes portfolio services like Surprise Trader and Technology Innovators. Interactive Brokers, BGC Group, and Robinhood are among the recommended stocks to consider. Download the free report for the best stocks for the next 30 days.



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