OpenAI Just Came for Wall Street’s Junior Bankers. Morgan Stanley Helped Build the Thing.
OpenAI Just Came for Wall Street’s Junior Bankers. Morgan Stanley Helped Build the Thing.
Omor Ibne EhsanSun, September 13, 2026 at 5:45 PM UTC
0
Dogora Sun / Shutterstock.comQuick Read -
Morgan Stanley's investment banking revenue surged 58% to $2.44 billion as it co-built an OpenAI tool designed to automate junior analyst research and pitch book work.
Every prior productivity wave in finance raised deal volume and compressed pricing, making more deals per banker the likelier outcome than permanently wider margins.
Evercore fell 16% year to date despite record first-half results, signaling markets already discount AI-driven fee pressure on pure-play advisory firms.
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Morgan Stanley didn't make the cut. Enter your email to see the names that beat MS. The report is free. Enter your email and see if any of your stocks made the cut.
OpenAI has rolled out a version of ChatGPT built for financial services, developed with Morgan Stanley (NYSE:MS) and Evercore (NYSE:EVR). The target is the research and pitch book work that junior analysts grind through, and CNBC's Kate Rooney reported the tool could pare down the 100-hour weeks those analysts work. The banks helped build the tool that automates their own analyst pipeline.
Nik Turley of OpenAI said, "We're effectively teaching ChatGPT to research like an analyst and to back up its conclusions like an analyst as well." OpenAI's answer to what happens to junior bankers was that "You don't need to do this by hand anymore. That didn't mean the end of the analysts. They're still going to be around. They will still have jobs. It will just make them more productive." For investors, the question is whether that productivity shows up as bank margin or gets competed away.
What The Tool Does And Why Banks Wanted It
Research, document work, and pitch book assembly are labor-intensive and standardized, making them obvious targets for a finance-tuned language model. The harder engineering problem is ensuring citations trail conclusions, since a memo without sources won't reach a managing director's client.
Free Report, Just Released
Why Didn't MS Make The Top 10 List?
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
And MS didn't make the cut!
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
Advertisement
The banks wanted this because their advisory engines are running hot. Morgan Stanley's investment banking revenue reached $2.44 billion in the second quarter, up 58% year over year, with advisory alone at $798 million. Evercore ran 296 fee-paying advisory engagements in the quarter, with 132 fees of $1 million or more. Automating standardized work lets senior bankers cover more clients. Chief executive Ted Pick told analysts AI was one of two defining themes of 2026 and that its "potential for enhanced efficiencies and productivity is only beginning to be realized" (Q2 2026 8-K).
Economics: Margin Or Fee Pressure?
Compensation is the largest cost line at any advisory firm. Evercore's adjusted compensation ratio was 63.5% in the second quarter; Morgan Stanley's firmwide efficiency ratio was 65% year to date. If analyst hours become machine hours, the temptation is to model savings straight into pretax margin. That conclusion is likely wrong, for reasons the history of financial technology makes clear.
Every previous productivity wave in finance, from electronic execution to index construction, raised volume and compressed pricing rather than widening margins. Advisory fees are negotiated per deal, and if every rival has the same tool, sophisticated corporate clients will price it in. The likelier outcome is more deals per senior banker, not permanently fatter margins. Morgan Stanley's 26.6% return on tangible common equity and Evercore's 19% quarterly operating margin are cyclical highs to defend.
Pipeline Risk For Junior Bankers
OpenAI's framing leans on the spreadsheet analogy: Excel made analysts more productive while leaving the profession intact. The weakness is the apprenticeship. Spreadsheets changed output without removing the years of modeling work that trains a first-year analyst into a managing director. If the junior tier shrinks materially, the training pipeline for future advisors shrinks with it.
Evercore has run the opposite play, adding 19 new senior managing directors year to date and bringing its global investment banking SMD count to 188, with more than 50 currently ramping. Both firms are investing in humans and machines simultaneously, because the franchise risk of hollowing out the analyst class is larger than near-term wage savings.
Is MS Stock A Buy?
MS Analyst Ratings — 24/7 Wall St.
Morgan Stanley trades at a trailing P/E of 17x with a forward P/E of 16x, against a consensus analyst target of $237.33 versus a recent price of $212.74. The stock is up 21.74% year to date and 41.08% over one year. Evercore, by comparison, is down 15.94% year to date despite record first-half results, which tells you the market is already discounting some AI-driven fee pressure in the pure-play advisory model.
MS Price Target — 24/7 Wall St.
Morgan Stanley offers broader exposure to this theme because the integrated firm cushions any advisory margin compression with $10 trillion of client assets and a reauthorized $20 billion buyback. On the balance of a strong cycle, disciplined capital return, and a reasonable multiple, Morgan Stanley looks well positioned among the money-center peers for investors researching this theme.
Got $1,000? Before You Buy MS, Read This
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. And MS wasn't one of them.
They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list -->>
Contact editorial@247wallst.com for any questions or corrections.
Source: “AOL Money”
