Wall street firms Goldman Sachs (GS) and Morgan Stanley (MS) smashed expectations with their Q4 results this week. Both banks were big beneficiaries of increased deal volumes rather than stock trading.
| Goldman Sachs: $958.5 (+3%) | Morgan Stanley: $189 (+4.5%) |
| Market cap: $300bn | Market cap: $300bn |
TOP ADVISOR
Goldman Sachs posted Q4 net profit of $4.4 billion, a record not just for the firm but for Wall Street itself. Quarterly EPS (earnings per share) hit $14.01 against a consensus of $11.69 and EPS of $11.95 a year earlier.
There were $5 trillion of deals globally last year, driven by the AI dash-for-cash and lower US interest rates. Goldman advised on $1.5 trillion of deals including the $56 billion leveraged buy-out of games company Electronic Arts.
The firm also advised on the $7.2 billion Medline (MDLN) IPO, the largest global listing of 2025, and Aphabet’s (GOOG) $32 billion takeover of Wiz. Corporate banking fees were $4.6 billion while investment banking fees hit a record $2.5 billion.
Goldman was also helped by the unwiinding of its credit card deal with Apple (AAPL) which generated a $145 million one-off gain. By passing the business to JPMorgan Chase (JPM), Goldman was able to release around $2.5 billion of loan loss provisions
David Solomon, chairman and CEO, said he expected momentum to accelerate in 2026, activating ‘a flywheel of activity’ across the firm.
IPO BOOM COMING
Morgan Stanley also blasted past estimates with its Q4 results, although not to such a dramatic extent. Quarterly EPS hit $2.68 against a consensus of $2.44 helped by record investment banking revenue of $2.4 billion.
Ted Pick, chairman and CEO, said the firm delivered ‘outstanding performance’ with record annual revenue of $70.6 billion. Pick put the firm’s success down to multi-year investments which contributed to growth and momentum.
Both Goldman Sachs and Morgan Stanley are set to benefit from a mega-wave of IPOs coming this year. AI firms Anthropic AI and OpenAI are both expected to list, as is Elon Musk’s Space Exploration (SpaceX).
Analysts expect Anthropic to list with a valuation of around $350 billion and OpenAI to be valued at around $500 billion. SPaceX is also thought to be preparing a listing which would see the company valued at more than $800 billion.
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