Morgan Stanley Surpasses Earnings Expectations Led by Strong Wealth Management Performance

Morgan Stanley posted fourth-quarter 2025 net income of $2.41 billion, or $2.98 per share, surpassing the consensus estimate of $2.75 per share. The results reflect a 14% year-over-year increase in revenue, reaching $14.3 billion, with wealth management contributing $6.8 billion in revenue—a 19% jump from the same period in 2024. The firm's client assets under management (AUM) climbed to $4.2 trillion, marking an 11% increase from the prior year, fueled by strong market performance and net inflows of $87 billion during the quarter. The surge in wealth management earnings was supported by improved fee income and higher client engagement, particularly in the institutional and private wealth units. Investment banking revenue declined slightly to $2.9 billion, down 3% year-over-year, due to a cooler merger and acquisition environment. However, the firm's trading revenue rose 12% to $3.1 billion, driven by increased activity in fixed income and equities. Market participants reacted positively, with Morgan Stanley shares rising 4.2% in after-hours trading. The performance underscores the firm’s resilience in diversified revenue streams, particularly in wealth management, which now accounts for 47% of total revenue—a record share. Analysts note that sustained equity market strength and continued client confidence are key factors supporting future growth. The results come as major U.S. indices reached new all-time highs, with the S&P 500 closing above 5,400 in December 2025. This environment benefits firms like Morgan Stanley that derive significant income from asset-based fees tied to market performance and client balances.