Wells Fargo’s Mike Mayo says the AI scare trade in bank stocks is overblown

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. 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 a...