The Financial Post reports in its Friday edition that the recent weakness in artificial intelligence high flyers has investors rotating into a less glamorous corner of the market: financial stocks. A Bloomberg dispatch to the Post says the group has been the S&P 500 index's second-biggest gainer in the past three months, trailing only health stocks. That has put the KBW Bank Index of the largest lenders on track to beat the broader equities gauge for a third consecutive year and would mark the index's longest streak of outperformance since 2003. As worries are swirling around lofty valuations of tech megacaps, investors are moving money into companies that provide all the cash for the AI buildout. To Wall Street, rock-solid earnings in the sector coupled with signs the U.S. economy is humming along mean the momentum in banks has more room to run. "You're starting to see evidence that banks are among the greatest beneficiaries of the tech and AI revolution," said Wells Fargo analyst Mike Mayo. "Banks benefit from AI capex and the echo effect on the top line and the efficiency benefits on the bottom line." The KBW Bank Index has advanced in each of the past four sessions, widening its rally this year to 18 per cent.
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