Morgan Stanley shares surged over 4% on Thursday, January 15, 2026, closing at $189.52 after the financial giant reported fourth-quarter earnings that significantly exceeded Wall Street expectations. The stock jumped from a previous close of $180.78, driven by robust performance across multiple business segments.The rally was fueled by a remarkable 47% year-over-year increase in investment banking revenue, reaching $2.41 billion, as dealmaking activity accelerated and debt underwriting fees nearly doubled. Morgan Stanley posted earnings of $2.68 per share, well above the analyst consensus of $2.44, while total revenue reached $17.89 billion, surpassing estimates of $17.75 billion.Investment Banking Revenue Jumps 47% in Q4Morgan Stanley’s fourth-quarter results demonstrated exceptional strength across its core business lines, with net revenue of $17.89 billion marking a 10.3% increase from $16.2 billion in the year-ago quarter. The bank’s pretax profit margin stood at 32%, reflecting efficient operations despite a challenging market environment.Investment banking emerged as the star performer, with revenue climbing to $2.41 billion from $1.64 billion a year earlier, fueled by a wave of large mergers and acquisitions that pushed global dealmaking past $5.1 trillion in 2025. Debt underwriting revenue surged nearly 93% to $785 million, while equity underwriting jumped 8.6%.The institutional securities division generated $7.93 billion in revenue for the quarter, slightly exceeding analyst expectations of $7.89 billion. Equities trading contributed record revenue for the year as clients rebalanced portfolios amid volatile markets shaped by shifting monetary policy expectations and AI-driven market dynamics.The bank played key roles in major IPOs including BETA Technologies, Andersen Group, and Medline, the largest IPO of 2025. Morgan Stanley also served as exclusive advisor to Meta on its joint venture with Blue Owl Capital to develop the Hyperion data center campus in Louisiana.Wealth Management and Client Assets Reach New HighsMorgan Stanley’s wealth management division continued its impressive trajectory, with revenue rising 13% to $8.43 billion in the quarter and setting a full-year record. The division benefited from rising markets and net new asset inflows of $122.3 billion, including contributions from clients introduced by the investment banking division.Total client assets reached $7.38 trillion, up 5% from the previous quarter and 19% year-over-year. Fee-based asset flows totaled $45.6 billion, highlighting the division’s role as a stable revenue source to offset more volatile areas such as trading and investment banking.CFO Sharon Yeshaya indicated the bank is approaching its long-term goal of $10 trillion in client assets under management, underscoring the success of its integrated wealth management strategy. The investment management division also posted record net revenue of $6.5 billion for the year, with Q4 revenue reaching $1.72 billion, up 5% year-over-year.Looking ahead, executives expressed optimism about the dealmaking pipeline, citing growing enthusiasm around artificial intelligence and expectations of Federal Reserve rate cuts as factors encouraging CEO activity. The bank anticipates increased deal flow in healthcare and industrials, with private equity sponsors also ramping up activity given the dual-track alternatives of M&A transactions or IPOs.***Looking to start your trading day ahead of the curve?Get up to speed before the bell with Bull Whisper—a sharp, daily premarket newsletter packed with key news, market-moving updates, and actionable insights for traders.Start your day with an edge. Subscribe to Bull Whisper using this link.