Finance

JPMorgan is ‘the Nvidia of banking,’ top-ranked analyst says

admin 



Amid the sea of numbers that surfaced at JPMorgan Chase’s investor day, the one that stood out to a top-read analyst is this: $17 billion.

That’s the total investment the $562 billion financial firm is going to spend on technology this year, noted large-cap bank analyst Mike Mayo. “That’s a record—no bank has ever spent $17 billion on tech in one year,” Mayo told CNBC on Monday. “That’s equal to the total expenses…for the eight largest banks and that’s what JPMorgan spends on tech alone.”

Mayo, a managing director at Wells Fargo Securities, has a penchant for speaking bluntly about banks and their leaders. Dimon has even admitted to reading his reports and enjoying their “banter.” On Monday, Mayo said JPMorgan’s investment in tech is turning JPMorgan into “the Nvidia of banking,” and Dimon into a digital leader, even if the bank CEO hasn’t “internalized” that information yet.

“They’re spending it on AI; they’re spending it on digital banking; they’re modernizing the back office; they’re trying to be the preeminent digital bank 2.0, which is the next version of banking,” said Mayo. That next iteration involves creating new products, services, relationships, and engagements that were previously unavailable in analog form, he said. “JPMorgan is at the forefront of being that digital leader,” he added.

The bank, which holds $5 trillion in client assets and employs 310,000 people, said Monday it will allocate the tech investment across its businesses and strategy. About $4.5 billion will fund products and user experiences, and $3.1 billion will go to modernization, security, and software development. The remainder will be spread across its wealth management, community, and commercial and investment banking businesses.

One thing JPM isn’t doing, noted Mayo, is buying back stock. JPMorgan shares hit a high of $205 on Monday, before dropping back to $196. According to Dimon, buying back stock at that price “is a mistake.”

On Dimon’s buyback stance, Mayo believes the CEO is borrowing a phrase from legendary investor Warren Buffett: “Be fearful when others are greedy, and be greedy when others are fearful.” 

Mayo said Dimon has a “healthy paranoia” as the CEO of a global bank because anything can hit the company. On the other hand, it’s frustrating for investors if JPMorgan doesn’t buy back stock at the current price while Dimon is selling stock for the first time in his career. In February and April, Dimon cashed out 1 million shares of JPMorgan stock, with the total proceeds valued at about $183 million. The sales were the first two in the CEO’s 19-year history at the bank, and he announced them in advance.

Overall, Dimon’s remarks and JPMorgan’s investor-day materials overall were bullish for one of Mayo’s favorite stocks, Citigroup. He quipped that Citigroup’s CEO might want to be grateful for Dimon’s stance.

“Jane Fraser should send a thank-you note to Jamie Dimon saying, ‘Thank you because your theme supports our stock.’”

Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free.



Source link

Recommended Posts

Gaming

Interactive Graphic Novel ‘Songs of Travel’ Is Out Now on iOS for No cost Next Its Debut on Android Before This Thirty day period – TouchArcade

Causa Creations was initially going to start its interactive graphic novel Music of Travel (Cost-free) on iOS and Android concurrently on Could 9th. Songs of Vacation strike Android, but the iOS variation had been delayed. Currently, Tunes of Journey has at last absent stay all over the world on iOS for totally free. If you […]

admin 
Finance

A toddler was trapped in a Tesla soon after its battery died devoid of warning amid document heat waves—’safety comes last’ at Tesla, skilled suggests

A 20-month year outdated woman in Arizona was a short while ago locked within a Tesla Product Y after the car’s battery died, producing a “life threatening situation” in which firefighters had to split open up the door with an ax to rescue her.  Renee Sanchez, the girl’s grandmother, loaded the girl into her vehicle […]

admin 
Finance

Does Medicare cover breast reduction medical procedures?

Breast reduction operation, also identified as reduction mammaplasty, requires the elimination of pores and skin and tissue from the breasts, then reshaping them to a more compact size. This variety of medical procedures has been on the increase since the pandemic. Cosmetic breast reduction surgeries—those that had been not regarded medically essential and compensated for […]

admin