Banco Santander, S.A. (NYSE:SAN) continues to remain one of Jim Cramer’s top European stocks. The CNBC TV host praised the firm several times in 2025. For instance, in February 2025, he remarked that Banco Santander, S.A. (NYSE:SAN) was “on track to become one of the most profitable banks in the world.” Cramer added that the bank was marching steadily “towards [its] goal of 20% return on tangible equity by 2028.” Back then, Cramer also praised the bank as investors were looking for markets outside the US. As oil prices surged once again amidst the conflict between the US and Iran, Cramer mentioned Banco Santander, S.A. (NYSE:SAN) in a brief tweet:
“Hard to amount an advance with oil higher; meanwhile European banks remind us that this group is a winner right now. Deutsche Bank good, SAN best in show”
Banco Santander, S.A. (NYSE:SAN)’s recent performance, which has seen the shares gain 67% over the past year and by 19.7% year-to-date, has also led investors to wonder whether it can post more growth in the future. The bank’s recent earnings, which covered the first half. of 2026, also contributed to this debate. During H1 2026, Banco Santander, S.A. (NYSE:SAN) posted €8.97 billion in net income to post a 31% annual growth. This growth was spurred by the bank’s net interest margin (NIM) sitting at 2.71%, its success in managing loan yields to manage customer deposit costs, growing its customer base by 12 million to 181 million and cost discipline initiatives to cut down its product catalog to 4,000 from 10,000.
However, while the bulls believe that the strong earnings performance continues to merit optimism, the bears are wondering whether Banco Santander, S.A. (NYSE:SAN)’s current valuation multiple can keep up with the high expectations. The bank’s forward P/E ratio of 12.18 is also higher over the year-ago figure of 8.64, which leads the bears to warn that potential upside might already be priced into the stock. Additionally, Banco Santander, S.A. (NYSE:SAN) is also experiencing weak performance across some regions, such as Brazil which posted a 17.6% drop in second quarter profit. The weak performance generated worries about whether Banco Santander, S.A. (NYSE:SAN) could sustain strong performance across all regions.
Compared to SAN, Deutsche Bank Aktiengesellschaft (NYSE:DB)’s shares have performed modestly as they are up by 10% over the past year and are down by 6% year-to-date. The bank’s bulls and bears are split across revenue and profit. While Deutsche Bank Aktiengesellschaft (NYSE:DB)’s second quarter results saw it post €9.69 billion in revenue to beat analyst estimates, profit dropped by 12% sequentially. Deutsche Bank Aktiengesellschaft (NYSE:DB)’s forward P/E ratio of 9.73 is also lower than SAN and it reflects the split in investor views regarding the long term prospects of the bank.
Switching to hedge funds, in Q4 2025, 18 out of the 1,041 hedge funds part of Insider Monkey’s database had held SAN’s stock. This figure jumped to 25 out of 1,022 in Q1 2026. On the other hand, 24 and 27 funds had held a stake in Deutsche Bank Aktiengesellschaft (NYSE:DB) during Q4 and Q1, respectively, showing that the funds are leaning slightly towards the latter. Short interest as a percentage of float is less than 1% for both banks.
Insider Monkey tracks hedge fund sentiment to answer questions like whether Wells Fargo is the best bank stock to buy. Even though hedge fund sentiment towards SAB and DB improved during the first quarter, they aren’t among the 12 Undervalued Financial Stocks To Buy Now.
While Insider Monkey acknowledges the risk and potential of SAN and DB as investments, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SAN or DB that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
