Wall Street’s Big Banks Shine as Investment Banking Hits Four-Year High
Wall Street is basking in a financial glow. Goldman Sachs and Morgan Stanley closed out 2025 with blockbuster fourth-quarter earnings, capping the best year for investment banking in four years. Investor confidence, rising stock markets, and a surge in dealmaking combined to lift both banks to new heights.
Goldman reported a net income of $4.6 billion, a 12% increase from the prior year, while Morgan Stanley posted $4.4 billion in profits, up 18%, buoyed by a 45% jump in advisory fees. Shares of both banks surged, with Morgan Stanley climbing 5.7% and Goldman up 4% in Thursday trading.
Deal Fever: CEOs Eye Strategic Moves
Central to the surge is a renewed appetite for corporate deals. Goldman CEO David Solomon highlighted the bank’s largest deal backlog since the pandemic, as executives capitalize on looser regulations under the Trump administration.
“I think CEOs and boards are looking and saying, OK, we’ve got a window here of a handful of years where the opportunity to consider big, strategic, transformative things is certainly possible.”
Morgan Stanley’s Ted Pick noted a shift in corporate behavior: companies are moving past a “stuck boardroom mentality,” now willing to borrow and make bold acquisitions as interest rates ease.
Equities Trading: The Unsung Hero
Equities trading, once considered a volatile crutch after the 2008 financial crisis, proved equally pivotal. For 2025, all five major U.S. banks posted record trading revenues, totaling $60 billion. Goldman led the pack with $4.3 billion in equity trading revenue for Q4 alone, surpassing Morgan Stanley’s $3.7 billion.
Asset & Wealth Management: Stability Meets Growth
Beyond trading and dealmaking, asset and wealth management provided a stabilizing force. Morgan Stanley’s client assets exceeded $9 trillion for the first time, edging closer to its $10 trillion goal. Goldman set ambitious medium-term targets, aiming to oversee $750 billion in alternative assets by 2030.
Even BlackRock, the industry giant in asset management, celebrated its largest quarterly inflows ever, pushing assets under management above $14 trillion.
A Mixed Bag for Other Banks
While Goldman and Morgan Stanley soared, not all Wall Street giants shared in the boom:
JPMorgan saw a 5% decline in advisory fees
Bank of America eked out a 0.7% gain
Citigroup posted a 35% increase in investment banking fees, signaling a notable turnaround
The Takeaway
Wall Street’s 2025 finale demonstrates the power of strategic dealmaking and strong trading markets. Between Goldman’s record-breaking trading revenues, Morgan Stanley’s advisory dominance, and massive inflows into wealth management, the sector shows resilience and adaptability.
As CEOs act on the deregulatory tailwinds and markets continue to climb, 2026 could be another year where Wall Street’s giants thrive, setting the stage for ambitious acquisitions, record trading, and expanded global influence.