Morgan Stanley Crushes Wall Street Forecasts With Record-Breaking Quarter

Bloomberg, the Financial Times, Reuters, and CNBC contributed to this report.

Morgan Stanley just blew past Wall Street’s expectations — by the widest margin in nearly five years — as dealmaking, stock trading, and wealth management all fired on full throttle.

The bank reported a 45% surge in profit to $4.6 billion, or $2.80 a share, far ahead of analysts’ forecasts for $2.10. Revenue jumped 18% to a record $18.2 billion, easily beating estimates. Shares spiked about 5% in premarket trading and are now up more than 20% this year.

“This was a standout quarter across every business line,” said CEO Ted Pick, who credited the results to a surge in capital markets activity and “a rebound in strategic M&A.”

Translation: dealmaking is back in a big way.

Investment banking revenue soared 44% from a year earlier to $2.1 billion, thanks to a burst of new IPOs and mergers — including the $85 billion Union Pacific–Norfolk Southern rail megadeal, the largest transaction of the year.

Equities trading — long Morgan Stanley’s pride and joy — jumped 35% to $4.1 billion, pushing the bank ahead of rival Goldman Sachs for the first time since 2022. Fixed-income trading climbed 8%, rounding out a blockbuster showing from the trading floor.

“We’re number one again in equities,” CFO Sharon Yeshaya told analysts, adding that the investment-banking pipeline is “at all-time highs.”

The firm’s wealth management arm — which now oversees $8.9 trillion in client assets — also delivered, with revenue up 13% to $8.2 billion and a healthy 30% profit margin. Morgan Stanley pulled in $81 billion in new assets during the quarter as markets rallied and clients kept spending.

Morgan Stanley’s performance mirrors a broader Wall Street resurgence. A red-hot stock market and renewed corporate confidence underpinned strong results from peers like JPMorgan and Goldman Sachs earlier this week. With US companies striking more mergers and IPOs, global dealmaking has already crossed $3 trillion this year — its busiest stretch since the pandemic boom.

For Ted Pick, who took over as CEO earlier this year, the quarter was proof that the firm’s two engines — Wall Street banking and wealth management — are both running at full speed. Morgan Stanley has reclaimed its edge in equities, locked in record revenue, and is inching closer to its long-term goal of $10 trillion in wealth assets.

In short, the storied investment bank didn’t just beat the Street — it lapped it.