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Key Points
The five largest banks reported mostly strong earnings last week, driven by investment banking.
Lending has also proved to be healthy, and that's SoFi's bread and butter.
The SpaceX IPO was a help to both the big banks and to SoFi, which provided retail access.
It's been a rough year for SoFi Technologies (NASDAQ: SOFI) shareholders. The stock is down 34% year to date in a thriving bull market.
But as the second-quarter earnings report approaches, investors got excellent news from the big banks, including JPMorgan Chase and Goldman Sachs. Bank stocks in general tend to move as a group, and the good news should trickle down to SoFi as well. Here's what's happening.
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What's good for some banks is good for all banks
The main growth driver for both JPMorgan Chase and Goldman Sachs was investment banking. Both companies reported strong growth in the segment: 55% for Goldman Sachs and 45% for JPMorgan Chase.
Investment banking includes activities like initial public offerings (IPOs) and other capital raises, mergers and acquisitions (M&A), and asset management -- the kinds of things that Wall Street is known for doing. Heightened investment banking activity is a great sign of a healthy economy, where businesses transact and make deals.
High IPO activity often comes when there's a strong bull market, and Q2 featured the Space Exploration Technologies (SpaceX) IPO, the largest ever. Goldman Sachs said that M&A activity increased 90% year over year in the quarter and that the artificial intelligence (AI) build-out is driving growth in many areas.
Increased activity in the big banks is good for smaller banks, too. More money is going around, more people are investing, and that leads to a robust economy. While there have been warning signs about the economy, conditions remain strong so far.
It's not just investment banking
While investment banking accounted for much of the growth in Q2, it was a great quarter all around for all segments. In particular, lending was strong, which is an excellent indicator for SoFi. At JPMorgan Chase, for example, average loans were up 10% year over year.
SoFi has expanded into a full digital banking app, but its original and core business is lending. Lending was responsible for more than half of total revenue in the 2026 first quarter, and it increased 55% year over year. Total originations were up 68%, with particular strength in home loans, which were up 137%, and student loans, which were up 119%.
SoFi doesn't have an investment banking arm, but it's also benefiting from the wave of capital activity through its investing tools, and it was one of the platforms that offered retail IPO access to SpaceX.
SoFi reports Q2 earnings on July 29, and there's a lot to get excited about now.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in SoFi Technologies. The Motley Fool has positions in and recommends Goldman Sachs Group and JPMorgan Chase. The Motley Fool has a disclosure policy.
