Name: Banks, financials could benefit from productivity of using AI tools
Uploaded: 2026-01-14T17:21:52.264Z
Duration: 2 min 30 s
Description: David Bianco, CIO of DWS Group Americas, says banks and financials are preferred investment sectors, citing strong recent earnings and expectations for continued growth.

David Bianco, CIO of DWS Group Americas, says banks and financials are preferred investment sectors, citing strong recent earnings and expectations for continued growth.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

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David Bianco, CIO of DWS Group Americas, identified banks and financials as preferred investment sectors, citing strong recent earnings and expectations for continued growth. He emphasized that banks are benefiting from favorable interest rate margins and the adoption of AI tools, which are enhancing productivity within the sector.

Bianco also addressed sector valuations, noting that large banks offer value compared to the broader S&P 500, and downplayed concerns about regulatory proposals affecting major banks. He further discussed reallocating capital from energy and defense stocks, while maintaining a positive outlook on selective consumer stocks for future growth.

Banks, financials could benefit from productivity of using AI tools

As investors digest those bank earnings, our next guest does list financials as one of his top sector picks. Joining us here at Post 9 this morning, DWS Group, America's CIO, David Bianco. Good morning. Great to have you back. Is this just the classic running into the quarter hot? Well, look, I think the banks right here are something to just buy right away. They had a great quarter. Not mixed great. Last year was strong. This year should be even better. All engines are firing from investment banking markets. We expect the curve, the interest rate curve and that interest margins to continue to be beneficial to banks. Also, I believe banks and financials are one of these sectors that benefits from the productivity of using AI tools. So I would just buy this dip. In a market where it's difficult to find value, this is our preferred value play, the big banks. What do you think? When does a multiple on the space start to get aggressive? Well, some people look at this still on a price to book multiple basis. I wouldn't do that at all. These are businesses that have a lot of intangible assets, a lot of ability to earn on services, particularly these big, big, big banks that we that we favor. When you see banks trading at something like 15 times what would seem to be a normalized earnings, that makes that makes some people pause. But the S&P 500 is trading at 23, 24 times this year's earnings. So it's the preferred value play. There should be strong earnings growth and dividends out of this space. You don't worry about, I don't know, surprise proposals like capping credit card payments? Well, yeah, we are noticing these things, a flurry of these type of announcements. That is more of a concern for certain lower credit quality lending credit cards. I don't think so much of concern for the big banks and their book of business. We are noticing other calls, for instance, the defense stocks. Oil defense doing well, given the geopolitical flare ups in the world. I would take capital from energy and maybe even a little bit of defense. We're still overweight defense. But our view, we've heard another message from the administration. Defense companies should be prioritizing production over profits. I think you're going to hear that a lot more. That makes you not like the stocks because they actually rally. We still like them. We're still overweight them. It's an area where we've been looking to deploy into some other areas where there are some selective opportunities in consumer stocks that we think will benefit in the springtime.

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Banks, financials could benefit from productivity of using AI tools

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