- Tom Lee said a blockchain-based JPMorgan could run with ~20,000 staff versus 313,000, operating more like a software platform.
- He argued blockchain enables secure settlement while AI automates operations, replacing labor costs with technology spending.
- Lee said banks using this model could shift from book value pricing to higher earnings multiples, like Walmart and Costco.
Tom Lee stated that blockchain and AI could change how major financial institutions are valued. He referenced JPMorgan as an example while outlining how a bank built on new infrastructure would operate with fewer employees and greater system transparency. Lee made these comments as part of his broader analysis on banking models and their potential shift toward technology-driven operations.
A Bank Operating Like Software
According to Tom Lee, JPMorgan currently functions with around 313,000 employees. He said a version of the institution built on blockchain might operate with closer to 20,000 employees.
He described blockchain as a system for recordkeeping, finality, and security, with AI reducing labor demands through automation. He said this structure would resemble a technology platform.
He stated that this transition would replace human labor with technology spending. He added that blockchain would anchor transaction settlement, while AI would handle operational clarity.
Shift From Book Value Toward Earnings Models
Lee also said the market could reconsider how banks are priced. Currently, he noted that traditional banks trade on metrics such as price-to-tangible book value. He argued that if operations resembled software platforms, valuations could shift toward earnings multiples instead.
He compared this to developments cited by Cathie Wood. She referenced Walmart and Costco, which once traded like consumer staples before their systematization increased valuations. Lee said Walmart and Costco previously traded between 15 to 16 times earnings. After system changes, he said they moved toward 35 to 50 times forward earnings.
Walmart and Costco Example Cited by Lee
Lee highlighted that Walmart and Costco reached multiples higher than Nvidia’s current earnings ratio of around 30 times. He used this as an example of how system upgrades affected valuation frameworks. He then linked the model to potential outcomes in the banking sector if blockchain and AI become core infrastructure elements.
