The Wall Street deal boom 2025 has propelled investment banks to record profits, with Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) capping a strong year in dealmaking and trading activity. The surge in mergers, acquisitions, and equity trading fees underscores the resilience of the financial sector even as some rivals experienced softer activity late in the year.
Goldman Sachs Tops Q4 and Full-Year Results
Goldman Sachs reported a fourth-quarter net income of $4.6 billion, or $14.01 per share, marking a 12% increase from the same period in 2024. The firm benefited from a combination of robust equity trading fees and strong dealmaking revenue. Its markets unit recorded $4.3 billion in equity trading fees during the quarter, up 23%, while full-year trading revenue grew 16% from 2024 levels.
The bank’s M&A advisory business was a standout, soaring 41% to $1.36 billion compared to Q4 2024. Full-year dealmaking fees rose 25% to $2.57 billion, in line with analyst expectations. Goldman also reported its highest-ever annual equity trading fees, demonstrating the firm’s ability to capitalize on both market volatility and strategic corporate transactions.
David Solomon, Chairman and CEO of Goldman Sachs, commented, “We continue to see high levels of client engagement across our franchise and expect momentum to accelerate in 2026, activating a flywheel of activity across our entire firm.”
Morgan Stanley Records Strong Growth
Morgan Stanley’s performance also highlighted the Wall Street deal boom 2025. The bank posted fourth-quarter net income of $4.4 billion, an 18% increase year-over-year, fueled by a 47% jump in dealmaking revenue. Its equities trading unit contributed significantly to the results, with quarterly equity trading fees rising 10% and full-year fees up 28% from 2024.
The firm’s CEO, Ted Pick, noted, “Our Institutional Securities business served as a trusted advisor to clients as investment banking activity accelerated and global markets remained strong.” Morgan Stanley achieved record full-year net revenues and net income, reflecting the benefits of a sustained boom in mergers, acquisitions, and market activity.
Shares of Morgan Stanley climbed more than 4% following the earnings release, while Goldman Sachs shares rose over 2%, signaling investor confidence in the dealmaking-driven growth.
Contrasting Performance Among Rivals
Not all Wall Street banks enjoyed the same level of dealmaking success in late 2025. JPMorgan Chase (NYSE:JPM) reported a 4% decline in investment banking fees compared to the previous year, citing delayed deals pushing activity into 2026. CEO Jamie Dimon described competition in dealmaking as “like trench warfare,” highlighting the intensity of the current environment.
Bank of America (NYSE:BAC) posted a modest 1% increase in investment banking fees, although declines in equity underwriting and merger advisory partially offset gains. Wells Fargo (NYSE:WFC) saw fees fall 1%, yet still recorded its highest full-year dealmaking revenue ever. Citigroup (NYSE:C) delivered a strong quarter, with M&A advisory revenue up 84%, driving total dealmaking fees 35% higher to $1.29 billion.
The mixed results underscore that while Goldman Sachs and Morgan Stanley captured the bulk of the late-2025 deal activity, the overall market remains competitive, with timing and execution critical to annual performance.
Key Drivers of the Wall Street Deal Boom 2025
Several factors contributed to the robust performance of investment banks during the deal boom:
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Equity trading fees: Heightened market activity and corporate financing drove record trading revenue.
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M&A advisory: Accelerated corporate transactions boosted advisory fees for top-tier banks.
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Strategic positioning: Banks with strong relationships and advisory capabilities, such as GS and MS, captured more deals.
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Timing of deals: Delays in some transactions shifted revenue recognition, benefiting certain firms while limiting others.
The surge in fees demonstrates how Wall Street can profit from both volatile markets and strategic advisory services, solidifying the role of investment banking as a major revenue generator.
Outlook for 2026
With the momentum from 2025, Goldman Sachs and Morgan Stanley are well-positioned for continued success in 2026. Analysts expect dealmaking activity and trading volumes to remain strong, especially as banks leverage client engagement and expertise in complex transactions. Both firms have indicated that current pipelines are healthy, suggesting that the Wall Street deal boom 2025 could extend into the new year.
Conclusion
The Wall Street deal boom 2025 has underscored the importance of mergers, acquisitions, and equity trading to top investment banks. Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) capitalized on record advisory and trading revenue, setting the stage for potential growth in 2026. While competitors experienced mixed results, the boom illustrates how market activity and strategic positioning continue to drive profits in the financial sector. Investors should watch for sustained dealmaking momentum as a key indicator of Wall Street profitability.
