Wall Street’s best 12 months for investment banking in four years came to an end when Goldman Sachs and Morgan Stanley released spectacular results for the last quarter of 2025. This week, four of the five major US investment banks announced an increase in quarterly revenues from advising work, boosting bankers’ hopes that the Trump administration’s deregulatory program will result in a boom for the sector.
As businesses looked to take advantage of laxer US laws, Goldman CEO David Solomon claimed the firm has its biggest backlog of acquisitions since the epidemic. “I believe that CEOs and boards are looking and thinking, ‘Okay, we have a window here of a few years where the opportunity to consider big, strategic, transformative things is certainly possible.'”
Goldman and Morgan Stanley’s results from yesterday demonstrated how their core Wall Street businesses have benefited from a resurgent desire for dealmaking and soaring stock prices.
While profits at Morgan Stanley increased 18% to $4.4 billion, Goldman recorded net income of $4.6 billion for the quarter, a 12% increase over the same period last year. Both banks’ stocks reached all-time highs yesterday afternoon, with Goldman up 4.5% and Morgan Stanley up over 5.7%.
The two main drivers of earnings were investment banking and stock trading, with Morgan Stanley surpassing rival JPMorgan Chase in financial consulting revenues thanks to a 45% increase in dealmaking fees.
As borrowing rates decline, corporate America is emerging from a “stuck boardroom mentality,” according to Ted Pick, chief executive of Morgan Stanley. Executives are now more inclined to borrow money and make significant purchases. He declared, “There is really no more time to waste.”
Only JPMorgan, which released its earnings on Tuesday, reported a 5% year-over-year decline in investment banking fees for the fourth quarter of 2025. While Citigroup’s turnaround showed success with a 35% increase in investment banking fees, Bank of America barely managed a 0.7% improvement.
Corporate America is breaking from a “stuck boardroom mentality,” according to Morgan Stanley CEO Ted Pick, as borrowing rates drop. These days, executives are more likely to take out loans and make large expenditures. “There is really no more time to waste,” he said. The only company to report a 5% year-over-year decline in investment banking fees in the last quarter of 2025 was JPMorgan, which announced its profits on Tuesday.
Bank of America only managed a 0.7% improvement, whereas Citigroup’s turnaround demonstrated success with a 35% increase in investment banking fees.
In the fourth quarter, Morgan Stanley’s customer assets surpassed $9 trillion for the first time in its asset management business, a field the bank has grown into to support its more erratic investment banking and trading operations. The company moved closer to its goal of managing $10 trillion across its asset and wealth management divisions.
One of Goldman’s goals for its asset and wealth management division is to oversee $750 billion worth of alternative assets by 2030.
For the first time, assets under management surpassed $14 trillion, according to asset management behemoth BlackRock’s largest-ever quarterly inflows.
