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Outlook of Nov 11, 2026. Latest Capital Markets outlook →

Capital Markets — industry outlook

  • Period: 2026-10-21 to 2026-11-11
  • Events: 36
  • Generated: 2026-11-11T07:30:00.005Z

AI Infrastructure Build-Out and Power Constraints

Data center developers and operators project sustained, record-breaking demand for power and compute capacity extending through 2028 and 2029, with power and infrastructure identified as the primary bottleneck over semiconductor chips. Several firms have secured multi-year leases with investment-grade tenants (e.g., Anthropic, Google, Frontier AI Labs) to de-risk capital deployment, targeting annualized run rates of $700 million (WULF) and $800–850 million (GLXY) by end of 2027. Construction costs for critical IT megawatts are projected to remain within $8–10 million (WULF) to $10–12 million (WULF) or $6 million (RIOT) per megawatt. Companies emphasize a shift toward "energy infrastructure" models utilizing "powered land leases" or triple-net structures to mitigate operational risk, with RIOT projecting an unlevered yield on cost of ~28% at full deployment.

  • WULF: Confirmed $19 billion in contracted 20-year revenue with Anthropic; expects $700 million annualized run rate in FY2026 with CB4/CB5 online. Targets $2.4 billion in total cash/restricted liquidity by end of Q3 2026.
  • GLXY: Projects $800–850 million annualized Helios leasing revenue run rate exiting 2027; Phase 2 (260 MW) deliveries begin Q2 2027. Secured "Batch Zero" classifications for ~4.2 GW total capacity.
  • RIOT: Projects lease revenue ramping to $250 million in 2027 and $1.8 billion in 2028; full deployment NOI of ~$2.2 billion. 1,151 MW contracted; 1,151 MW pipeline.
  • ATRS (AtkinsRéalis): Anticipates AI build-out driving engineering demand for power, nuclear, data centers, and cooling; views this as a "perfect timing" opportunity for CANDU EC6 licensing concluding by end of 2027.
  • PURR: Expects monumental increase in on-chain Real World Asset (RWA) trading volume (50x–500x over 5–10 years) as part of a broader "on-chain finance" evolution.

Macro Volatility, Interest Rates, and Restructuring Cycles

The industry consensus views the macro environment as characterized by a "higher for longer" rate regime, elevated volatility, and specific sector distress creating opportunities for capital structure advisory and restructuring. Management teams across advisory and market-making firms anticipate a surge in restructuring activity, driven by debt maturity walls in 2028–2029, particularly in the software and AI sectors where financing conditions are tightening. While higher rates are viewed as a tailwind for restructuring revenue, they create valuation disconnections in M&A.

  • LAZ: Expects 2027 restructuring growth driven by AI ecosystem "independent frontier labs" and "neocloud providers" facing distress from higher rates; pipeline for 2027 is more than double the 2025 level.
  • HLI: Identifies software sector dislocation as a catalyst for restructuring comparable to the 2017 oil & gas cycle; expects restructuring revenues to persist through fiscal 2028.
  • MC: Anticipates liability management activity transitioning to traditional restructurings as lender selectivity increases; software sector debt maturities creating work in 2027–2028.
  • PWP: Expects ~70 mega-cap ($10B+) transactions in 2026; views the primary growth driver in the $1B–$5B segment with fee realization up significantly versus 2020–2021 levels.
  • PJT: Projects 2026 M&A activity as the second-best year on record; expects elevated restructuring activity due to debt maturity walls and AI financing stress.
  • VIRT: Views current market environment as having "slowed down" compared to H1, leading to lower capital usage but expects volatility to remain above historical averages.
  • TW: Consensus and management view 2027 as volatile driven by inflation, fiscal supply, and geopolitical conflicts; views this as bullish for rates and credit businesses.

M&A, Private Capital, and Deal Flow Dynamics

Investment banking and advisory firms report a bifurcated market: robust pipeline activity driven by strategic imperatives (scale, AI, supply chain) and high-quality sponsor transactions, tempered by valuation gaps and regulatory uncertainty. M&A firms are seeing a "pull-forward" of deals before potential regulatory changes in 2028–2029, while private capital advisory (PCA) is gaining momentum with full revenue ramps expected in 2027.

  • LAZ: Pipeline for 2027 is more than double the 2025 level; notes a potential shift in U.S. administration in 2028 could alter antitrust enforcement, accelerating transactions.
  • EVR: Expects "significant buildup" of opportunities in digital infrastructure debt advisory over the next five plus years; liability management and restructuring due to 2028–2029 debt maturities.
  • MC: Sponsor M&A transaction volume advised is up ~30% YTD; PCA revenue recognition expected to become "meaningful" in 2027.
  • PWP: Backlog up 3x YoY; expects portion of backlog to convert to revenue in "early part of 2027."
  • PJT: Global announced M&A activity trending up; expects 2026 midterms to create a "pull-forward" window for large strategic deals.
  • MRX: Targets 10–20% adjusted profit before tax growth for FY2027, driven by acquisitions (Levmet, WebTraders, Winterflat, BrightPoint).
  • SF: Anticipates rebound in Q4 2026 and further recovery in 2027 driven by post-election repositioning and depository M&A; no immediate plans for large-scale M&A.

Technology Investment, AI Integration, and Operational Efficiency

A broad spectrum of capital markets firms are accelerating investments in AI, machine learning, and data infrastructure to enhance trading execution, client services, and operational productivity. These investments are projected to increase expenses in the near term, with management expecting returns to materialize as workflows mature. The competitive landscape is characterized as a "technological arms race" where compute, power, and storage are critical differentiators.

  • TW: Tech costs up 31.8% YoY in Q3; AI investments expected to drive margin expansion but incremental expansion is anticipated to be more muted than in 2025. "Terra" AI assistant evolving from analytics to execution.
  • LAZ: Expanding AI and agentic workflows across financial advisory and asset management; goal is to reduce Associate-to-MD ratio.
  • VIRT: Expects continued incremental investment in physical infrastructure (compute, power, storage) due to AI spend; hiring targets to exceed 1,100 employees.
  • MRX: Developing "compute futures" and hedging products; views AI infrastructure investment as exceeding $1 trillion annually.
  • SF: Investment in Miao Technologies' AI treasury platform targeting $1 billion quarterly deposit growth; AI intended to enhance advisor productivity.
  • Coveo: Generative AI solutions represent 16% of ARR; accounted for >50% of Q2 bookings.
  • MIAX: Investing in unified tech stack to support new products; latency at 36 microseconds (99.9th percentile).

Market Electronification and Protocol Evolution

Equity, fixed income, and derivatives exchanges are witnessing a continued shift from voice/chat to electronic and automated workflows, described as having a "substantial runway" over the next decade. Companies are focusing on multi-leg workflows, algorithmic execution, and integrating new protocols (e.g., RFM, SWARMS) to capture market share from traditional voice-based systems.

  • TW: Industry still early; majority of global fixed income remains on voice/chat. Anticipates compounding growth as workflows shift to electronic/AI over the next 10 years. U.S. Treasuries basis/multi-leg trades up >50% YoY. Only 30% of cleared swaps market is electronified.
  • MIAX: Retail distribution via NinjaTrader live; additional platforms expected Q4 2026. Projected RPC moving from inverted ~$1.42 to positive $0.25–$0.30 range.
  • TW: Institutional U.S. Treasury share reached 23.6% in Q3; expects to continue widening lead over electronic peers.
  • TW: Non-bank liquidity providers (Jump, Jane, Citadel, Virtu) raising capital to warehouse larger positions, expected to increase market share in credit and direct RFQ.

Capital Allocation, Dividends, and Shareholder Returns

Across the sector, firms are prioritizing disciplined capital allocation, balancing organic growth investments with shareholder returns via dividends and buybacks. Many companies are maintaining or expanding buyback authorizations while targeting specific leverage ratios or capital base targets.

  • TW: $125 million in aggregate share repurchase authorization remaining; committed to offsetting dilution from equity comp at current share price.
  • LAZ: Share repurchases of $33 million in Q3; quarterly dividend of $0.50 per share declared.
  • GLXY: Board approved additional $200 million buyback authorization; completed $200 million buyback in 2026.
  • MIAX: Q1 2027 CapEx partially pulled forward to 2026; $40 million capital increase executed for FCM.
  • MRX: Targets 10–20% adjusted PBT growth for FY2027; views current 23.7% margin as a stepping stone to 30%.
  • SF: Excess capital estimated at $360 million; buyback authorization has 6.2 million shares remaining.
  • CNCK: Future growth initiatives funded by cash from optimized core operations; no external financing for growth.
  • WULF: Expects to receive incremental $150 million from Abernathy JV sale by Dec 31, 2026; $130 million by April 30, 2027.

Emerging Markets, Regulatory Changes, and Geopolitical Headwinds

Global capital markets participants are navigating complex regulatory landscapes, including evolving crypto frameworks in Japan and Europe, potential tariff impacts, and geopolitical tensions affecting M&A and project execution.

  • CNCK: Japan market undergoing structural reset; crypto repositioned as "financial product"; asset management rollout projected for mid-2027 to early 2028.
  • TW: Management expects rates to remain higher for longer post-midterm elections. Fed, ECB, BoJ, RBA entered rate-hiking regime.
  • LAZ: U.S. regulatory environment viewed as favorable and constructive; notes potential antitrust shifts in 2028–2029.
  • WULF: Views clear regulatory frameworks as beneficial; cites Kentucky as model of constructive support.
  • MRX: M&A strategy includes targeting transactions in Asia and Latin America; regulatory timelines vary by region.
  • PJP: Notes China as a "wild card" for cross-border deals; 2026 midterms may impact deal closures.
  • TW: Revenue mix approx. 44% international, 30% non-USD; exposure to currency fluctuations.
  • GLXY: Texas regulatory audits expected in December 2026; ERCOT power allocations in April 2027.

Specific Company Guidance and Financial Targets

Individual firms provided specific numerical guidance for the current and upcoming fiscal years, ranging from expense reductions to revenue ramp-ups.

  • TW: FY 2026 Adjusted Expenses range $1.155 billion–$1.175 billion; Q4 2026 Other Revenues expected down low single digits sequentially.
  • LAZ: Campbell Lutyens projected to generate $500 million revenue and be accretive to earnings in 2027. Tax rate high 20s percentage range for FY 2026.
  • MIAX: FY 2026 Adjusted Operating Expenses lowered to $254 million–$257 million; CapEx raised to $43 million–$46 million. Q3 2027 Access Fees up 10%.
  • SPIN: FY 2026 Revenue "stable to low single-digit growth"; Adjusted EBITDA "mid to upper single-digit growth." Tariff headwind of ~$30 million in 2026.
  • ATRS: FY 2026 Organic Revenue Growth revised to "low single-digit percentage"; Net Cash from Operating Activities "at least $500 million".
  • HLI: FY 2027 Effective Tax Rate 26%–28%; Adjusted Expense Ratio long-term target constant at 61.5% for compensation.
  • Coveo: FY 2027 SaaS Subscription Revenue range $156M–$188M; Adjusted EBITDA $2M–$7M.
  • POLLARD: Q4 2026 revenue and margin expected to improve; Kansas iLottery profitability improvements starting early part of 2027.
  • KITS: Q4 2026 Revenue $64 million–$66 million; FY 2026 Revenue $244 million–$246 million.
  • SF: Q4 2026 Net Interest Income $295 million–$305 million; Q4 Institutional Transactional Revenue $145 million–$150 million.
  • EVR: Striving for adjusted non-comp ratio 14.2% or lower; Senior Managing D productivity targets 50–66% in first full year.
  • MC: FY 2026 Non-comp expenses up ~19% YoY; Tax rate increase of 2–4 points in 2027.
  • PWP: FY 2026 Compensation ratio 67%; Non-comp expense single-digit percent decrease.
  • DEFT (EcoSynthetix): No formal guidance; expects pulp pricing spread recovery (> $200/ton) to drive revenue recovery.
  • DEFT (Foraco): Expects 60% utilization for 2027; aims to return to 20% EBITDA margin.
  • DEFT (Champion's): Full commercial production for DRPF plant by end of FY 2027.
  • DEFT (Boardwalk): FY 2026 same property NOI growth 1%–2%; FFO per unit $4.65–$4.75.
  • DEFT (Cascade): FY 2026 CapEx $150–$175 million; 2027 Adjusted EBITDA target above $650 million.
  • DEFT (Quebecor): CapEx "pickup" in Q4; debt repayment priority for remaining $100 million term loan.
  • DEFT (Chartwell): Operating Expenses per occupied suite growth below 4% over next three years; Labor compensation increases 4%–5% in 2027.
  • DEFT (HGBL): HGP real estate monetization begins 2027; HGC wind-down costs limited to 2026.
  • DEFT (Spin Master): Q4 2026 outlook targets "modest revenue" and "similar adjusted EBITDA growth"; excludes $25 million movie contribution in 2027.
  • DEFT (Pollard): Q4 2026 revenue/margin improve; margins return to "more normal product and customer mix" in 2027.
  • DEFT (Coveo): Q3 Fiscal 2027 SaaS Revenue $39.7M–$40.2M; Total Revenue $40.6M–$41.1M.
  • DEFT (EcoSynthetix): No formal guidance; expects pulp pricing spread recovery (> $200/ton) to drive revenue recovery.
  • DEFT (Foraco): Expects 60% utilization for 2027; aims to return to 20% EBITDA margin.
  • DEFT (Champion's): Full commercial production for DRPF plant by end of FY 2027.
  • DEFT (Boardwalk): FY 2026 same property NOI growth 1%–2%; FFO per unit $4.65–$4.75.
  • DEFT (Cascade): FY 2026 CapEx $150–$175 million; 2027 Adjusted EBITDA target above $650 million.
  • DEFT (Quebecor): CapEx "pickup" in Q4; debt repayment priority for remaining $100 million term loan.
  • DEFT (Chartwell): Operating Expenses per occupied suite growth below 4% over next three years; Labor compensation increases 4%–5% in 2027.
  • DEFT (HGBL): HGP real estate monetization begins 2027; HGC wind-down costs limited to 2026.
  • DEFT (Spin Master): Q4 2026 outlook targets "modest revenue" and "similar adjusted EBITDA growth"; excludes $25 million movie contribution in 2027.
  • DEFT (Pollard): Q4 2026 revenue/margin improve; margins return to "more normal product and customer mix" in 2027.
  • DEFT (Coveo): Q3 Fiscal 2027 SaaS Revenue $39.7M–$40.2M; Total Revenue $40.6M–$41.1M.