Free Trial

JPMorgan: The 'NVIDIA of Banking' Poised for More Gains?

London, United Kingdom - October 27, 2024: J.P. Morgan is a prominent global financial services firm that offers a wide range of financial services — Stock Editorial Photography

Key Points

  • Wells Fargo is calling JPMorgan Chase the NVIDIA of the banking sector due to its new quantum computing implementation technology.
  • Volatility breakouts in the broader market could trigger a capital flight to the bank, and recent performance shows.
  • Markets are willing to pay a premium for this banking stock for good reason, and investors should pay attention. 
  • Five stocks we like better than JPMorgan Chase & Co..
Remove Ads

The financial sector is overdue for an overhaul, where technology implementation may shift the way everyone looks at banking and finance altogether. This time around, analysts at Wells Fargo have landed on one Wall Street leader looking to push the envelope further into the new revolution for the space, even calling it the "NVIDIA of banking" today due to its new exposure to quantum computing implementation for its trading and banking business.

JPMorgan Chase & Co. Today

JPMorgan Chase & Co. stock logo
JPMJPM 90-day performance
JPMorgan Chase & Co.
$242.96 -5.16 (-2.08%)
As of 03/28/2025 03:59 PM Eastern
This is a fair market value price provided by Polygon.io. Learn more.
52-Week Range
$179.20
$280.25
Dividend Yield
2.30%
P/E Ratio
12.31
Price Target
$252.89

Shares of JPMorgan Chase & Co. NYSE: JPM have come on the hot seat unexpectedly after this Wells Fargo take; implications of the bank now being able to rake in millions and millions more in trading revenue could also make them a target for hedge funds and prime brokers to trade under this new proprietary technology, which acts as a tailwind for upside in the coming months.

However, when investors zoom out, they will realize that JPMorgan also acts as a historical safe haven that investors like to flow into when the economy threatens to slow down.

Of course, the fundamentals are only realized when the technical setup also aligns, and the volatility breakouts in the S&P 500 might be enough to trigger this rotation today, a sign that will become obvious for investors in just a bit.

Safety Spreads, Favorable for JPMorgan Chase Stock

Over the past five years, which arguably covers an entire business cycle, investors can compare the performance of JPMorgan stock with that of other important peers in the industry, such as Goldman Sachs Group Inc. NYSE: GS. The main difference between these two and their business models is what sets them apart in this risk-on or risk-off rotation.

Goldman Sachs derives more of its earnings and revenue from investment banking and corporate finance, making it infinitely more dependent on the credit and business cycle within the United States economy. Because of this, it has been considered a leading indicator of economic expectations moving forward.

JPMorgan, on the other hand, is more exposed to earnings coming from the commercial banking side, including consumer finance products and other conventional finance activities. This translates into a more defensive business, which shows in its price action.

Remove Ads

Now that the S&P 500 has fallen into correction territory, investors can make sense of the performance spreads between the two banks. Over the past month, JPMorgan has outperformed Goldman Sachs by as much as 5%, which isn’t jaw-dropping. Still, it is enough to trigger further rotations in momentum funds.

Short Sellers Run From a New Quantum Development

Achieving truly random results through artificial intelligence, or in this case, quantum computing, is the mathematical equivalent of being able to trade every possible scenario at any given moment. What this means for Wall Street, specifically those who rely on discretionary human trading, is futile.

JPMorgan and its trading department reported a record annual profit in 2024, as reported by their latest quarterly financial figures. While investment banking had its fair share of the action, sales and trading revenue brought in the bank’s windfall, reporting a net growth rate of up to 21%.

JPMorgan Chase & Co. MarketRank™ Stock Analysis

Overall MarketRank™
95th Percentile
Analyst Rating
Moderate Buy
Upside/Downside
4.1% Upside
Short Interest Level
Healthy
Dividend Strength
Strong
Environmental Score
-0.80
News Sentiment
1.03mentions of JPMorgan Chase & Co. in the last 14 days
Insider Trading
Selling Shares
Proj. Earnings Growth
7.29%
See Full Analysis

These results raise the question of whether this new technology had already been implemented before Wells Fargo’s piece broke it down and whether this outperformance will become the norm moving forward for the bank, which could undeniably boost its underlying earnings per share (EPS).

Understanding that this company-specific tailwind also sits atop the fundamental rotation benefit during a volatile stock market (like today’s) leads to the conclusion that JPMorgan stock might be the best buy in the banking peer group today.

For investors in need of further evidence, the market’s subtle message also reiterates this story for JPMorgan stock, which now trades at a forward price-to-earnings (P/E) ratio of 12.8x. This valuation matters because of where it stands relative to other peers in the space, including Goldman Sachs and even Bank of America Co. NYSE: BAC.

Some argue that this premium valuation calls for additional downside, though seasoned traders and investors would remind them that the market always has a good reason to overpay for certain stocks as long as the underlying story justifies the premium.

In the case of JPMorgan Chase, the story does seem to line up and justify the potential rallies that the market is now implying could come for the bank’s stock in the coming months and quarters.

Should You Invest $1,000 in JPMorgan Chase & Co. Right Now?

Before you consider JPMorgan Chase & Co., you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and JPMorgan Chase & Co. wasn't on the list.

While JPMorgan Chase & Co. currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Ten Starter Stocks For Beginners to Buy Now Cover

Just getting into the stock market? These 10 simple stocks can help beginning investors build long-term wealth without knowing options, technicals, or other advanced strategies.

Get This Free Report
Gabriel Osorio-Mazilli
About The Author

Gabriel Osorio-Mazilli

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
The Goldman Sachs Group (GS)
4.954 of 5 stars
$543.04-2.8%2.21%13.39Hold$590.60
Bank of America (BAC)
4.9242 of 5 stars
$41.24-3.1%2.52%12.81Moderate Buy$48.45
JPMorgan Chase & Co. (JPM)
4.7232 of 5 stars
$242.97-2.1%2.30%12.31Moderate Buy$252.89
Compare These Stocks  Add These Stocks to My Watchlist 

Remove Ads

Featured Articles and Offers

Recent Videos

3 Bank Stocks Defying Market Turmoil—Cheap Options Trades!
Time to Buy SoFi? Fintech’s Next Big Move
3 Chip Stocks Primed for a Comeback—Have They Found the Bottom?

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines

Remove Ads