Morgan Stanley posted record quarterly revenue as trading and M&A fees surged

Morgan Stanley $MS posted record quarterly revenue in the first quarter of 2026, with total revenue rising 16% to $20.58 billion and profit jumping 29% to $5.57 billion, or $3.43 per share. Both figures topped analyst expectations, according to LSEG estimates cited by CNBC.

The standout performer was equities trading, where revenue surged to a record $5.15 billion, a 25% increase that came in well ahead of analyst estimates. Hedge fund prime brokerage and derivatives activity were identified by the firm as the primary drivers of the gains. A 29% jump in fixed income revenue, to $3.36 billion, was fueled in part by commodities desks that capitalized on swings in energy prices — enough for Morgan Stanley to surpass Goldman Sachs $GS in that trading category during the period.

Fees from advisory work on completed deals, along with equity and debt issuance, lifted investment banking revenue by 36% to $2.12 billion. Wealth management revenue rose 16% to a record $8.52 billion, with the firm pulling in $118.4 billion in net new assets, according to Bloomberg. Among the firm's business lines, investment management was the only one to disappoint, with revenue declining 4.2% to $1.54 billion; Morgan Stanley pointed to reduced carried interest on private funds as the explanation.

Total non-interest expenses came in at $13.5 billion, up 12% year-over-year and slightly above forecasts, with the earnings statement showing $178 million set aside for severance as the firm reduced headcount during the quarter, according to Bloomberg. Even so, the workforce count of 83,922 at the close of the quarter was actually higher than where it ended in 2025.

The EquityZen deal, which closed during the quarter, marked Ted Pick's first acquisition since taking over as CEO; the platform gives investors access to shares of privately held companies. Fees on the majority of EquityZen transactions were cut by 50% in February as Morgan Stanley moved to undercut rivals and grow the business, according to Bloomberg.

CFO Sharon Yeshaya said market volatility during the quarter created an opening for the firm. "What it did for us is it really provided an opportunity for us to showcase advice," she told Bloomberg. On deal activity, Yeshaya said backlogs had remained steady: "The backlogs themselves have not changed materially. If anything there's a steadiness across that."

Morgan Stanley's results wrap up first-quarter earnings for the largest U.S. banks. Earlier in the week, Goldman Sachs reported a 14% revenue increase, with its equities desk setting a record at $5.33 billion, and JPMorgan $JPM Chase disclosed a 13% profit gain underpinned by record markets revenue of $11.6 billion; stock-trading records were set across Goldman, JPMorgan, Bank of America $BAC, and Citigroup $C during the period, according to Bloomberg.

Pick, who received a 32% compensation increase after Morgan Stanley posted its strongest year on record in 2025, took the helm in 2024.