Bank of America is bullish on U.S. brokers, asset managers and exchanges heading into 2025, raising price targets across the sector by an average of 14%, citing strong tailwinds from deregulation, rising retail investor engagement and solid U.S. GDP growth projected at 2%-2.5%.
In a new report released Wednesday, analyst Craig Siegenthaler dubbed 2025 as the year of “extensions” of ongoing trends, amid a fresh boost from a red political sweep and deregulation efforts under a Trump presidency.
According to Bank of America, the red wave of the 2024 elections is also set to open new doors for crypto and alternative investments (Alts) and give brokers and asset managers room to shine.
Alts: Blue Owl Leads The Charge
Alternative asset managers (Alts) are primed for a strong year, with Blue Owl Capital emerging as the standout pick.
Siegenthaler highlighted Blue Owl's unique position: "Under-owned, undervalued and underappreciated.”
Brokers: Interactive Brokers In A “Goldilocks” Setup
Interactive Brokers is Bank of America’s top broker pick for 2025, as solid U.S. GDP growth (2.0%-2.5%) and sticky inflation (>2.5%) create a "Goldilocks" environment for brokers.
Bank of America is also bullish on Robinhood Markets Inc. (NASDAQ:HOOD), seen as “best-positioned given high tech/low legacy cost models with strong innovation track records.”
Interactive Brokers
Exchanges: Tradeweb Offers Long-Term Growth
Tradeweb Markets is Bank of America's top pick among exchanges due to its wide product breadth, first-mover innovation, and long-term visibility.
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