Goldman, Morgan Stanley Jump After Q4 Earnings Beats

Strong earnings from two major Wall Street firms shifted the tone for financial stocks after a mixed week.

Shares of Goldman Sachs (GS) and Morgan Stanley (MS) rose Thursday morning after both firms reported fourth-quarter results that topped expectations, reversing some of the pressure seen across bank stocks earlier in the week.

Key Points

• Morgan Stanley reported $122 billion in quarterly net new assets, more than doubling year-earlier levels.
• Goldman Sachs posted fourth-quarter net earnings of $4.62 billion, up 12% year over year.
• The rebound helped lift broader bank sentiment after prior earnings disappointed investors.

Morgan Stanley’s Wealth Momentum Took Center Stage

Morgan Stanley’s results were driven primarily by its wealth management business, which delivered one of its strongest quarters on record. The firm reported $122 billion in net new assets during the quarter, a 116% increase from the same period a year earlier.

That surge highlights how client engagement and asset gathering accelerated as markets recovered and investor activity picked up. Net new assets are a key metric for wealth managers because they expand the base of client money that can generate recurring management fees over time.

Beyond inflows, Morgan Stanley reported record full-year net revenues and net income, underscoring how its diversified business model benefited from both market activity and client demand. Its equities trading unit also reached record fee levels, with equity trading revenue rising 10% in the fourth quarter and 28% for the full year.

Management emphasized that investment banking activity accelerated during 2025, supported by stronger capital markets and client demand for advisory services. That momentum helped offset areas where activity slowed at some competitors late in the year.

Goldman Sachs Benefited From Trading and Dealmaking Strength

Goldman Sachs reported fourth-quarter net earnings of $4.62 billion, marking a 12% increase from a year earlier. Earnings per share came in at $14.01, well above consensus expectations.

While total fourth-quarter revenue declined slightly year over year to $13.45 billion, that headline figure masked significant strength in Goldman’s core institutional businesses. Global Banking & Markets revenue rose sharply, driven by a 25% jump in investment banking fees and a 41% increase in advisory revenue as merger and acquisition activity rebounded.

Equities trading was another standout. Goldman recorded its highest year ever for equity trading fees, with fourth-quarter equities revenue climbing to $4.3 billion. These results reflected active client trading and improved market conditions compared with earlier in the year.

For the full year, Goldman reported net revenue of $58.3 billion and net earnings of $17.2 billion. Assets under supervision rose to $3.61 trillion, up $469 billion from a year earlier, highlighting how market appreciation and inflows combined to lift client balances.

Why These Earnings Stood Out This Week

The positive reaction to Goldman Sachs and Morgan Stanley followed a sharp sell-off in bank stocks the prior session. Earnings from several large lenders had failed to meet investor expectations, pressuring the sector broadly.

On Thursday, sentiment improved. The KBW Nasdaq Bank Index rose 1.2%, reflecting renewed confidence after stronger-than-expected results from firms with heavy exposure to trading, advisory, and wealth management.

The contrast underscored a key theme this earnings season: banks with meaningful exposure to capital markets activity and affluent clients benefited more directly from market strength than those more reliant on traditional lending.

What It Means for Investors

The market response highlights how investors are differentiating within the financial sector. Strong results at Morgan Stanley and Goldman Sachs showed that earnings momentum remains uneven across banks, depending on business mix.

Wealth management inflows at Morgan Stanley reinforced the importance of fee-based revenue tied to client assets, which can scale as markets rise. At Goldman Sachs, trading and advisory strength demonstrated how dealmaking and market activity can meaningfully lift profits when conditions align.

At the same time, the broader backdrop remains important. Earlier weakness across bank stocks shows how quickly sentiment can shift based on earnings tone, even when headline results are positive.

Conclusion

Goldman Sachs (GS) and Morgan Stanley (MS) rallied after fourth-quarter earnings beats highlighted strength in wealth management, trading, and dealmaking. The move helped stabilize bank sentiment after a volatile stretch and underscored how business mix continues to shape market reactions this earnings season.

FAQs

Why did Goldman Sachs (GS) stock rise after earnings?
It rose because Goldman reported better-than-expected fourth-quarter earnings, including net earnings of $4.62 billion that were up 12% from a year earlier.

What drove Morgan Stanley’s (MS) positive reaction?
It was driven by strong wealth management results, including $122 billion in net new assets, more than double the year-earlier level.

How did trading and dealmaking affect Goldman’s results?
Trading and advisory activity boosted profits, with equities trading fees reaching record levels and advisory revenue rising sharply year over year.

Why did bank sentiment improve after these reports?
Sentiment improved because strong earnings from Goldman and Morgan Stanley contrasted with weaker results from some peers, lifting confidence across the sector.

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