How Tom Lee Sees AI and Blockchain Turning Banks Into the “Next Mag 7”

This article was first published on Deythere.

Tom Lee, co-founder of Fundstrat Global Advisors, recently said on CNBC that the combination of AI and the innovation behind blockchain could push the financial services industry in a way that transforms traditional banks into technology-like market leaders.

Specifically, he argued that the larger institutions like JPMorgan Chase and Goldman Sachs could begin to trade more like tech stocks, similar to the “Magnificent Seven,” as they implement these technologies to shave expenses and expand profit margins. 

View of Tom Lee: AI and Blockchain as Revenue Generators

Lee stressed in the interview with CNBC that the convergence of AI and blockchain has the potential to drive meaningful value for big financial service companies by reducing costs and improving efficiency. The main benefit of those technologies, Lee says, their ability to reduce labor intensity, a longstanding expense for banks.

“Financial services companies are really big beneficiaries of AI, and they’re big beneficiaries of using blockchain technology,” Lee said. “Both will allow them to reduce their employee intensity of their business.” 

Banks with heavy technology exposure could be on the verge of widening margins and trading more like tech stocks, he added.

AI can help automate the process of repetitive-based maneuvers, data analysis refinement and streamline decision-making processes to generate insights. Complementing AI is blockchain, which provides a safe, transparent mechanism for conducting transaction settlement and record-keeping. 

Collectively, these technologies have the promise of enabling banks to manage costs better than they ever have, and enhancing their competitiveness at the same time.

Why JPMorgan and Goldman Sachs Are Seen as Potential Tech Companies

JPMorgan Chase and Goldman Sachs are good examples of banks that stand to gain from implementing AI and blockchain, Lee said. They both have already made a lot of technological advancements, focusing on digital infrastructure, data analytics and blockchain projects.

Banking provides several benefits through blockchain, such as faster settlement, enhanced security, and reduced reconciliation costs. Paired with AI, which can improve risk modeling and automation of customer service, those technologies could fundamentally rewrite how banks do their business.

Lee said such moves could prompt investors to reassess valuations. That is because better operating efficiency often translates into fatter profit margins, which in turn allows for better price-to-earnings multiples, a trait frequently ascribed to technology companies. 

In doing so, the banks that adopt these technologies successfully could begin to trade more like tech stocks, erase the line between traditional finance and tech markets, and break into the ranks of dominant growth equities.

Tom Lee on the Larger Markets And Macro Trends

In addition to AI and blockchain, Lee also spoke about larger market trends that might drive financial services and technology convergence. One of the points he made was that there’s an opportunity for the Federal Reserve to take a relatively dovish posture into 2026, which could help buoy business confidence across various sectors.

Lee pointed to the ISM Purchasing Managers’ Index (PMI) as one signal of economic strength, and he says that for stocks, a move above 50 tends to suggest a risk-on environment. 

He also added that if the combination of AI and blockchain can help reduce the cost structures of the financial industry, those firms adopting these technologies could be in a better position to ride out macro cycles while participating in the potential future growth ones.

Conclusion

Tom Lee’s recent comments emphasize a growing belief that AI and blockchain technologies could transform the banking industry.

By helping to cut expenses and bring about greater efficiency, such technologies could enable large banks like JPMorgan and Goldman Sachs to boost profit margins and increasingly match their performance in the markets to that of tech-centric growth stocks. 

Lee’s observations, from a CNBC interview And corroborated by several recent reports, mirror the growing intrigue among investors about what technological adoption means for banking in the future.

Glossary

Artificial Intelligence (AI): Technology that allows machines and software to perform tasks that typically require human intelligence, like pattern recognition or decision making.

Blockchain: This is a distributed ledger technology, combining secure and transparent record of transactions across the network.

Employee Intensity: Ratio of human labor an organization spends on its business operations.

Margin expansion: an increase in the spread between revenue and operating costs, which often results in greater profitability.

ISM PMI: An index based on surveys of purchasing executives in the manufacturing sector; a reading above 50 indicates expansion.

Frequently Asked Questions About AI and Blockchain Banks

What did Tom Lee say about AI and blockchain in banking?

Tom Lee suggested AI and blockchain would allow financial services companies to diminish reliance on labor-intensive operations and expand margins, potentially causing banks to trade more like tech stocks.

Which banks did Lee say stand to gain the most?

Lee singled out JPMorgan Chase and Goldman Sachs as technology-savvy banks that stand to gain the most from these technologies.

What does “trade like tech stocks” mean?

‘Trade like tech’ is a reference to the higher valuation multiples and investor sentiment that technology companies often enjoy, reflecting their growth stories and potential for efficiency.

What does a dovish Fed have to do with Lee’s remarks?

Lee suggested that a more dovish Federal Reserve could boost business confidence and contribute to broader market growth, complementing technology adoption in the banking sector.

References

Crypto Briefing
CoinCentral
Bitget
phemex