STORY: Goldman Sachs and Morgan Stanley posted fourth-quarter profits that beat Wall Street expectations on Thursday, benefiting from a surge in dealmaking and stronger trading revenues in a turbulent market.
Equity traders capitalized on volatility and a broader rally in the U.S. market as investors speculated on the Federal Reserve's interest-rate path and the prospects for AI companies.
Goldman topped the global M&A rankings again in 2025, advising on huge deals including the more than $56 billion leveraged buyout of Electronic Arts and Alphabet's $32 billion acquisition of cloud security firm Wiz.
Both Goldman and Morgan Stanley are poised to benefit from the rebounded IPO market and will compete for a flurry of U.S. listings with the likes of SpaceX, OpenAI and Anthropic gearing up for potential listing this year.
Investment banking revenue advanced 47% in the fourth quarter at Morgan Stanley and total revenue for all of 2025 hit a record. It also boosted its quarterly dividend.
Goldman increased its dividend too.
While both banks expressed optimism for 2026, Morgan Stanley CEO Ted Pick warned about geopolitical risks and a "complicated" macroeconomic backdrop in a call with analysts.
Investors appeared optimistic ... shares of Morgan Stanley added more than five percent in Thursday morning trading while Goldman's shares rose more than four percent.
