Feb. 12 at 8:50 PM
Financial stocks fell on concerns that AI tools could disrupt advisory and banking businesses, but analysts argue the selloff is overdone and presents buying opportunities.
Charles Schwab is down about 13% since Monday, while LPL Financial and Ameriprise have dropped sharply. Fears stem from new AI platforms that could compete with human advisors, yet advisory-related revenue represents less than 27% of Schwab’s projected 2026 revenue. The firm is also expanding its own AI capabilities to enhance advisors, not replace them, and is expected to generate strong free cash flow. At 15.6x forward earnings, it trades well below the S&P 500’s multiple.
LPL, trading around 13x earnings, is similarly using AI to improve efficiency and margins. Investment banks appear even less vulnerable, as M&A advisory depends heavily on human judgment, with AI likely boosting productivity rather than replacing bankers.
$SCHW $LPLA $AMP $MC $SPX