Global banks are entering a structural reinvestment cycle for technology spending, with technology wallets of seven major banks increasing 16% since June 2024. According to Choice Institutional Equities, spending grew 7.8% year-on-year in June 2026, demonstrating resilience despite uneven macro conditions. Major banks including JPMorgan, Goldman Sachs, Morgan Stanley and Wells Fargo delivered double-digit YoY technology-spend growth. The spending is increasingly focused on AI, cybersecurity, cloud, data and modernisation, with AI accelerating broader technology transformation cycles.
Choice Institutional Equities has identified Coforge, Persistent Systems and Tech Mahindra as the best-positioned beneficiaries of the banking AI spending trend. The brokerage firm favours vendors combining scale, BFSI domain depth, modernisation capabilities and differentiated AI offerings. As reported by Choice Institutional Equities, the opportunity lies in structural wallet expansion plus vendor share gains, with AI as the key growth catalyst. The firm's top IT stock recommendations include Coforge with target price of ₹2,050, Persistent Systems at ₹6,350, and Tech Mahindra at ₹1,775.
The AI boom poses new financial stability risks as global investment reaches unprecedented levels. The Bank for International Settlements (BIS) estimates the world's five largest technology firms will invest more than $1 trillion in AI between 2025 and 2026, while industry forecasts suggest global AI investment could grow from about $500 billion now to as much as $4 trillion by 2030. According to BIS head Hernandez de Cos, the AI boom is increasingly being financed through debt and private credit rather than corporate earnings, which merits close scrutiny because much of the funding remains opaque and interconnected. The scale and speed of current investment warrant caution, drawing parallels with past booms such as the railway expansion era and dotcom surge.
Current estimates suggest AI could raise total factor productivity growth by about half a percentage point a year, depending on adoption pace and effective labour reallocation. Studies have found gains of between 10% and 65% in specific tasks, particularly in coding, consulting and professional writing. However, as Hernandez de Cos noted, while AI can enhance workers' productivity, it can also replace routine cognitive tasks. Economies closely tied to the technology supply chain, including South Korea, Singapore, Malaysia and Taiwan, have benefited from stronger export prices for AI chips and equipment. The broader question remains how much productivity improvements translate into economy-wide growth, with the long-term impact depending on policy choices and infrastructure investment.
