Goldman Sachs and Morgan Stanley Hit Record Highs Amid Surge in M&A Activity

Shares of Goldman Sachs and Morgan Stanley climbed to record levels on Thursday, marking a significant milestone for two of Wall Street’s most prominent investment banks. The gains come amid a noticeable uptick in merger and acquisition activity, with deal volume rising by 34% in the fourth quarter of 2025 compared to the same period the previous year, according to internal tracking data. This rebound follows a two-year lull in large-scale M&A, as high interest rates and economic uncertainty previously deterred corporate consolidation. The renewed appetite for deals stems from improved confidence in macroeconomic stability, declining borrowing costs, and a growing belief among executives that strategic acquisitions can unlock long-term value. Companies across technology, healthcare, and financial services sectors have initiated or accelerated integration plans, with over 1,200 announced transactions in 2025—up from 890 in 2024. Notably, several high-profile deals, including a $28 billion acquisition in the fintech space and a $42 billion cross-border merger in biopharma, have already closed or are in advanced stages. The upswing has directly benefited investment banks, which earn substantial fees from advising on and underwriting M&A deals. Goldman Sachs’ M&A advisory revenue rose 41% year-over-year in Q4, while Morgan Stanley reported a 39% increase, signaling stronger client engagement and deal execution. Analysts attribute the surge to renewed corporate leadership focus on scale, innovation, and market positioning in competitive industries. Market participants are watching closely for continued momentum, as sustained deal-making could drive further gains in financial stocks and boost broader equity indices. The rally also underscores a shift in sentiment, with companies now viewing the current environment as conducive to value-creating transactions—reversing earlier caution.