AI is reshaping expectations for interest rates, and that matters directly for financial sector stocks. Morgan Stanley now argues that AI driven gains could lift long term equilibrium rates, even as disinflationary effects get outweighed by stronger demand and investment. With markets paring back hopes for Federal Reserve cuts through 2026 and attention turning to upcoming FOMC meetings, investors are reassessing which large, financially strong companies might be better positioned if policy stays tighter for longer. This article walks through three stocks exposed to this AI and rates story, and how this catalyst may affect the investment case for each one.

Victory Capital Holdings (VCTR)

Overview: Victory Capital Holdings is a San Antonio based asset manager that runs a wide range of investment products for institutions, advisers, retirement platforms, and individual investors, including mutual funds, ETFs, separate accounts, alternatives, and 529 education plans, alongside providing fund administration, transfer agency, and distribution services.

Operations: Victory Capital Holdings generates about US$1.5b in revenue from providing investment management services and related products.

Market Cap: US$5.5b

Victory Capital Holdings provides exposure to how AI influenced interest rate expectations feed into asset values, and it pairs that macro sensitivity with company specific factors such as buybacks, international expansion, and a broad product lineup across mutual funds, ETFs, and alternatives. Forecast earnings growth of about 32.4% per year and reported earnings quality sit alongside Q1 2026 results showing revenue of US$388.0m and net income of US$112.1m. Margins have come down from last year and Return on Equity is 16.1%, with fee compression and acquisition risks still present. There is also premium CEO pay and some continued asset outflow to consider.

Victory Capital Holdings sits at the intersection of AI, higher for longer rates, and earnings momentum. Yet the real story may be how these forces line up against fee pressure and acquisitions in the analyst forecasts for Victory Capital Holdings

Netwealth Group (ASX:NWL)

Overview: Netwealth Group is an Australia based wealth management company that runs a digital investment and superannuation platform for financial advisers, private clients, and high net worth investors, bundling super, investment wrap accounts, managed accounts, research tools, and administration services into a single interface.

Operations: Netwealth Group generates about A$361.4m in revenue almost entirely from its Australian platform operations.

Market Cap: A$5.6b

Netwealth Group gives you direct exposure to how higher for longer interest rates and AI adoption can feed into the core plumbing of Australian wealth management. The company is leaning into AI to cut processing times and contact center workloads. Management expects this to support efficiency and limit future headcount growth. Continued investment in digital tools and adviser productivity is aimed at lifting funds on platform over time. Investors may wish to weigh forecast earnings growth around 32% per year, high current and projected Return on Equity, and expanding product breadth against factors such as fee pressure, margin compression from last year, reliance on external funding, and a rich P/E multiple that already reflects a significant amount of optimism.

Netwealth Group’s accelerating platform growth, AI push and rich P/E raise a sharp question for long term investors, so take a look at the full analyst forecasts for Netwealth Group to see what the market might be missing

NB Bancorp (NBBK)

Overview: NB Bancorp is the holding company for Needham Bank, a community focused lender serving Greater Boston with a full range of deposit accounts and loans, from local businesses and commercial real estate to homeowners, consumers, and mortgage warehouse clients, alongside an investment portfolio of government and corporate securities.

Operations: NB Bancorp generates about US$225.8m in revenue from its core banking activities.

Market Cap: US$877.4m

NB Bancorp provides targeted exposure to an environment of higher interest rates because its community banking model is closely tied to net interest income and loan growth. Analysts currently expect earnings growth of roughly 31.3% per year and revenue growth of 18%, alongside a P/E of 16.7x that is above some bank peers, so investors are paying for that profile. Recent results show net interest income of US$64.87m and net income of US$14.98m, plus buybacks and a dividend, but credit quality bears watching after a sharp rise in net charge offs. With Morgan Stanley describing interest rates as structurally higher, NB Bancorp offers a more straightforward way to focus on that theme without relying on complex capital markets businesses.

NB Bancorp’s earnings profile, higher P/E and rising net charge offs suggest a story that is still taking shape, so review the analyst forecasts for NB Bancorp before the next turn in credit quality and rates comes into focus.

The three financial stocks covered here are just a starting point. The full screener surfaced 43 more companies with equally compelling stories across banking, insurance, and related services in the Financial Sector Stocks screener.

Use Simply Wall St to identify, filter, and analyze the specific catalysts and narratives that matter most to you so you can focus on your highest conviction financial sector ideas.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.