ZACKSยท2025-11-17 14:42Market Overview - U.S. stock markets are experiencing a successful year, with major indexes like the Dow, S&P 500, and Nasdaq Composite up 11.2%, 14.8%, and 18.8% respectively [2] - The technology sector, particularly driven by advancements in generative and agentic artificial intelligence (AI), is the primary force behind this rally, although the finance sector has also contributed with the Financial Select Sector SPDR (XLF) up 8.5% year to date [3] Recommended Stocks for 2026 - Five finance stocks are recommended for investment in 2026, having risen over 30% this year: Morgan Stanley (MS), Interactive Brokers Group Inc. (IBKR), Robinhood Markets Inc. (HOOD), Cboe Global Markets Inc. (CBOE), and Invesco Ltd. (IVZ) [4][9] - All five stocks currently hold a Zacks Rank 1 (Strong Buy), indicating potential for further upside [4] Morgan Stanley (MS) - Morgan Stanley's focus on wealth and asset management, along with strategic acquisitions like EquityZen, is expected to enhance revenue growth, with projected increases of 11.7% in total revenues and 12.8% in investment banking fees for 2025 [7] - The firm has an expected revenue growth rate of 3.9% and earnings growth rate of 5.8% for next year, with a recent 3.7% improvement in the Zacks Consensus Estimate for earnings [10] Interactive Brokers Group Inc. (IBKR) - IBKR's revenue growth is supported by proprietary software development, lower compensation expenses, and expansion into emerging markets, with an expected revenue growth rate of 5.5% and earnings growth rate of 8.1% for next year [11][13] - Recent results showed solid revenue growth and lower expenses, indicating a positive outlook for the company [12] Robinhood Markets Inc. (HOOD) - Robinhood operates a financial services platform that allows trading in various assets, including cryptocurrencies, and is expected to benefit from increased retail market participation [14][15] - The company has an expected revenue growth rate of 20.3% and earnings growth rate of 16.2% for next year, with a notable 9.7% improvement in the Zacks Consensus Estimate for earnings [16] Cboe Global Markets Inc. (CBOE) - CBOE anticipates growth in trading volume, which will drive transaction fees and organic growth, with an increased revenue growth target for 2025 set to low double digits to mid-teens [17][18] - The company has an expected revenue growth rate of 2.7% and earnings growth rate of 4.7% for next year, with a 3% improvement in the Zacks Consensus Estimate for earnings [19] Invesco Ltd. (IVZ) - Invesco's financial performance is bolstered by higher assets under management (AUM) and strategic expansion plans, with an expected revenue growth rate of 14.4% and earnings growth rate of 28.6% for next year [20][22] - Recent initiatives, including converting QQQ into an open-end ETF and establishing a joint venture in India, are expected to support revenue growth [21]