Two of Wall Street's largest financial institutions, Morgan Stanley and Goldman Sachs, reported robust fourth-quarter and full-year 2025 earnings, triggering significant stock rallies and bolstering confidence in the broader financial sector.
Morgan Stanley's stock surged approximately 6% to trade near $191.64 after announcing Q4 net revenue of $17.9 billion, which exceeded market expectations. The bank's full-year revenue reached $70.6 billion, with net income of $16.9 billion. Key drivers included its wealth management division, which saw client assets grow to $9.3 trillion supported by $356 billion in net new assets for the year. The institutional securities division also performed well, generating $7.9 billion in Q4 revenue with notable gains in investment banking, M&A advisory, and underwriting. The firm reinforced its financial position with $4.6 billion in stock buybacks for the year and maintained a strong CET1 capital ratio of 15.0%.
Similarly, Goldman Sachs' stock jumped 4.7% to $976.65 following its earnings release. The bank posted record full-year 2025 net revenue of $58.28 billion and net earnings of $17.18 billion. For the fourth quarter, net revenue was $13.45 billion with net earnings of $4.62 billion, marking a 12% increase in quarterly profit. The investment banking and markets division achieved record annual revenue, fueled by strong deal flow and capital markets activity. The results included a one-time accounting adjustment related to the exit from the Apple credit-card partnership. Goldman Sachs highlighted a 340% total shareholder return since its first Investor Day and outlined strategic priorities for continued growth in 2026.
