Morgan Stanley posts biggest earnings beat in nearly 5 years with record quarterly revenue of $18.2 billion, shares up 4.7%

Morgan Stanley’s third quarter was marked by a perfect storm of favorable market dynamics, including increased trading activity and a rebound in deal-making. Stock trading revenue jumped 35% to $4.12 billion, a figure that not only exceeded internal estimates but also surpassed rival Goldman Sachs. Investment banking revenue rose 44% to $2.11 billion, boosted by a wave of completed mergers, initial public offerings and corporate fundraising, all fueled by optimism surrounding economic growth and the prospect of lower interest rates under the Trump administration.

Bank CEO Ted Beck and other executives mentioned the word “exceptional” several times in the subsequent earnings call with analysts. Beck mentioned the record top and bottom performance and said, “The capital markets flywheel is taking hold as the administration seeks to implement its three-pronged strategy to reshape the economy with the possibility of continued Fed rate cuts next year.”

During the call, CFO Sharon Yeshaya commented, “The company achieved exceptional results in the third quarter, underscoring the strength of our integrated global company.” ​

Wealth management and asset growth

The company’s wealth management division also achieved impressive results on the back of increased asset balances and client activity. Revenue from wealth management rose 13% to $8.23 billion, about $500 million ahead of analysts’ expectations, as total client assets rose to $8.9 trillion with $81 billion in net new asset inflows during the quarter. The division maintained a pre-tax margin of 30%, strengthening its position as a leader in this field

Morgan Stanley’s asset management business has benefited from swelling transaction and management fees as investors reorganize their portfolios amid ongoing market volatility and sector rotation. The continued strength of its wealth management and investment drivers has highlighted the firm’s resilience and ability to generate fee income during periods of financial market turmoil.

Shares of Morgan Stanley rose 4.7% in regular trading Wednesday after announcing its earnings, posting year-to-date gains of more than 30% as investors cheered the company’s confirmed results and outlook.

Expectations and competitive environment

Morgan Stanley’s third-quarter results reflected an industry-wide rebound, with major U.S. banks such as JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo also reporting earnings above consensus amid a rebound in capital markets and deal-making activity. The strong US economy and recent regulatory and tax reforms implemented by president Donald Trump have increased optimism about the continued expansion of capital markets. Morgan Stanley management has indicated expectations that the recent momentum will continue through the fourth quarter of the year and into 2026.

With its diversified revenue streams, record profitability, and strong guidance, Morgan Stanley has demonstrated its ability to capitalize on evolving market cycles, setting the bar high for financial services companies heading into the final months of 2025.​

For this story, luck Use generative AI to help with the rough draft. An editor verified the accuracy of the information before publication.