Key Moments
- Morgan Stanley’s first-quarter profit increased to $5.6 billion, or $3.43 per share, from $4.3 billion, or $2.60 per share, a year earlier.
- Investment banking revenue rose 36% to $2.12 billion, while equity trading revenue climbed 25% to $5.15 billion and fixed income revenue advanced 29% to $3.36 billion.
- Total quarterly revenue grew to $20.6 billion from $17.7 billion, and the stock was up 2% in premarket trading.
Investment Banking and Trading Drive Earnings Growth
Morgan Stanley reported higher first-quarter profit on Wednesday, supported by an upswing in dealmaking activity and significantly stronger performance across its trading operations.
Following a very active year for transactions in 2025, leading investment banks have been anticipating that momentum in mergers and acquisitions will extend into this year. They expect that a more accommodating regulatory backdrop could encourage cash-rich corporations to expand through acquisitions and combinations, even as the Iran war poses risks to the global economic outlook.
Within Morgan Stanley’s results, investment banking revenue increased 36% to $2.12 billion. Trading also delivered robust gains, with equity trading revenue rising 25% to $5.15 billion and fixed income revenue advancing 29% to $3.36 billion.
Other major U.S. banks, including Goldman Sachs, JPMorgan and Citigroup, also reported strong growth in investment banking revenue in the most recent quarter.
Market Backdrop: Volatility, Geopolitics, and M&A Flows
Global deal volumes reached $1.38 trillion in the latest first quarter, based on data from Dealogic, following a near record-breaking 2025 in which worldwide M&A activity exceeded $4.81 trillion.
At the same time, global markets have experienced sharp moves in recent weeks as an intensifying U.S.-Israeli conflict with Iran has pushed oil prices higher and stoked concerns that inflation may remain elevated for an extended period.
This volatility across asset classes has led investors to adjust their portfolios and increase hedging against potential downside, a pattern that typically supports higher client activity at trading desks and benefits firms such as Morgan Stanley.
Shares of Morgan Stanley were up 2% in premarket trading.
Selected Financial Metrics
| Metric | Latest Quarter | Year-Ago Quarter |
|---|---|---|
| Total revenue | $20.6 billion | $17.7 billion |
| Net profit | $5.6 billion | $4.3 billion |
| Earnings per share | $3.43 | $2.60 |
| Investment banking revenue | $2.12 billion | Not specified |
| Equity trading revenue | $5.15 billion | Not specified |
| Fixed income revenue | $3.36 billion | Not specified |
Advisory Roles and Capital Markets Pipeline
Investment Banking Shines
Morgan Stanley has been active on several high-profile mandates. The firm is among the advisers to Unilever on the proposed merger of its food business with McCormick, a transaction expected to create a $65 billion global food company.
Geopolitical tensions in the Middle East have, however, unsettled equity markets and reduced investors’ willingness to take risk, putting pressure on the market for initial public offerings. Despite this backdrop, some issuers, particularly in the industrials and defense segments, have continued to pursue listings.
Morgan Stanley is among the bookrunners leading the deal on SpaceX’s planned IPO, where the Elon Musk-led company could raise $75 billion at a potential valuation of $1.75 trillion.
Senior executives at large investment banks have noted that the environment for new listings has become more discerning amid economic uncertainty. They nonetheless anticipate that IPO activity will recover once conditions become more stable.
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