Wells Fargoās Mike Mayo says the AI scare trade in bank stocks is overblown
The veteran bank analyst argues customer trust gives lenders an edge that AI agents can't easily replicate, and expects earnings season to ease the pressure
Bank stocks spent September getting spooked by software. Wells Fargo analyst Mike Mayo thinks investors overreacted.
In an analysis dated September 29, 2026, Mayo described the recent pressure on the sector as an exaggerated “scare trade” built around artificial intelligence agents. His core argument is simple: customers trust their banks, and that trust is a competitive moat that a chatbot can’t easily cross.
What sparked the selloff
The anxiety came to a head on September 22. That day, Meta’s Muse AI was cited as a factor behind a sharp selloff in financial stocks.
The damage was real. Charles Schwab fell roughly 6%, while JPMorgan and Wells Fargo each dropped more than 3%.
The fear driving the trade centers on deposits. The worry is that AI agents could make it far easier for customers to shop around for the best deposit rates.
Bank stocks underperformed the broader market in September amid a mix of concerns: AI agents, uncertainty around the upcoming midterm elections, and rising interest rates.
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Mayo’s case for the banks
Mayo views the fears tied to AI-driven deposit competition and the midterms as unfounded. His reasoning rests on the trust customers place in their banks.
He also has a timeline in mind. Mayo expects the pressure on bank stocks to fade once major banks begin reporting earnings, starting October 13, 2026.
AI as a tool, not a threat
Mayo isn’t dismissing AI entirely. He sees it as a genuine productivity booster for banks themselves.
According to Mayo, those benefits take time to materialize and require human oversight along the way.
What this means
For investors, the next few weeks offer a clear test. Earnings kicking off October 13 will show whether the deposit fears have any footing in actual results.
The Schwab move is worth watching closely. Its roughly 6% drop on September 22 was the steepest among the names cited, which suggests investors saw it as especially exposed to easier rate shopping.