Morgan Stanley equity traders score record quarter, eclipsing Goldman Sachs

Morgan Stanley delivered a stellar performance in the third quarter, which ended 30 September 2025, with its stock trading division soaring past Wall Street expectations and successfully outpacing key rivals amid a surge in market activity.

The firm's equity trading revenue, the headline result, surged 35 per cent year-on-year to reach $4.12 billion, according to the bank’s statement released on Wednesday. This result emphatically exceeded analyst estimates of a 6.6 per cent increase, and more significantly, beat Goldman Sachs Group Inc.'s comparable $3.74 billion figure. This is a crucial win for Morgan Stanley, which, under Chief Executive Officer Ted Pick, has been vocal about its ambition to reclaim the top spot in the equity-trading business, a domain recently dominated by Goldman.

In fact, Morgan Stanley’s stock traders achieved their best third quarter ever, building on their previous best second quarter. This record was partly fuelled by exceptional results in their prime brokerage division. Furthermore, their fixed-income counterparts also recorded strong growth, bringing in 8 per cent more than the previous year and driving the total trading haul to $6.29 billion, substantially above the anticipated $5.5 billion.

Wealth Management and Financials

The firm’s dominant wealth-management business also exceeded revenue estimates, generating $8.2 billion. The division reported a robust pre-tax profit margin of 30 per cent after successfully attracting $81 billion in new client assets.

However, the unit faces an aggressive goal: achieving $1 trillion in net new assets over a three-year period. To meet this target, Morgan Stanley must pull in $232 billion during the final quarter of the year—a figure that is nearly triple the net assets secured in the third quarter alone.

Overall, total revenue for the quarter reached $18.2 billion, comfortably beating the average analyst estimate of $16.6 billion. The strong top-line performance, however, came with a caveat of higher-than-expected expenses. Compensation costs totalled $7.44 billion, pushing total non-interest expenses to $12.2 billion. This represented a 10 per cent increase from the previous year, surpassing analyst expectations of a 6.8 per cent rise.

Strategic Focus and Market Reaction

Shares in Morgan Stanley jumped 4 per cent in pre-market trading in New York, reflecting investor confidence. The stock was already up 24 per cent for the year through Tuesday.

Investor attention is also centred on how CEO Pick intends to use the firm’s capital, particularly after Morgan Stanley secured a lower capital requirement from the Federal Reserve last month.

In July, Mr Pick stated that the firm is actively reviewing "inorganic opportunities," but maintained that "the bar is super high."