As 2025 drew to a close, Goldman Sachs and Morgan Stanley stood as twin monuments to a Wall Street moment shaped by deregulation, deal-making hunger, and the collective imagination of investors chasing artificial intelligence's promise. Their double-digit profit surges — $4.62 billion and $4.4 billion respectively — reflect not merely corporate competence but the particular alchemy of a political and market environment that has rewarded financial complexity with uncommon generosity. Yet even in triumph, the story contains its contradictions: Goldman's quiet retreat from consumer banking, sold
Goldman Sachs, Morgan Stanley Post Double-Digit Profit Gains on Market Surge
Deal-making teams across Wall Street into overdrive
Mark
Why did Goldman and Morgan Stanley do so much better than the other big banks this quarter?
Mimi
They're pure-play investment banks. When deal-making surges and markets rally, that's where they make their money. The other banks have retail operations, credit card portfolios, consumer lending—all the things that get caught in the crossfire when the White House starts talking about interest rate caps.
Mark
So the deregulation is really the engine here?
Mimi
It's one engine. Deregulation removes friction from M&A, sure. But you also have this AI fever that's created its own deal momentum. Companies want to position themselves, acquire capabilities, merge with competitors. Goldman's investment banking fees jumped 25 percent. That doesn't happen without real activity.
Mark
What does the backlog tell us?
Mimi
That this isn't a one-quarter story. Both banks said their pending deal pipelines grew significantly. They're already working on transactions that will close and generate fees in the coming quarters. The momentum has legs.
Mark
Why did Goldman sell the Apple Card at a discount? That seems like a loss.
Mimi
It was a loss they were willing to take. Consumer banking was a distraction for them, and it wasn't working. Better to take the hit, move on, and focus on what they're actually good at—which, right now, is making money hand over fist in investment banking.
Mark
Is there any risk in this picture?
Mimi
The tension with the White House over Fed independence and interest rate caps is real. If that escalates, it could affect the other banks more immediately. But for Goldman and Morgan Stanley, as long as deal-making stays hot and markets stay buoyant, they're insulated.
El Pulso
- Goldman Sachs and Morgan Stanley each posted their strongest quarterly profits in recent memory, with earnings rising 12% and 19% respectively as markets surged and deal pipelines overflowed.
- The Trump administration's deregulatory posture has lit a fire under corporate M&A activity, sending investment banking fee revenues up 25% at Goldman and 22% at Morgan Stanley year-over-year.
- AI sector enthusiasm has become a secondary engine of Wall Street wealth, drawing investor capital and advisory mandates that have padded balance sheets across the industry.
- Larger diversified banks like JPMorgan and Citigroup also posted gains but face a more turbulent horizon, caught between White House pressure on credit card rates and unsettling signals about Federal Reserve independence.
- Goldman's sale of its Apple Card portfolio to JPMorgan — at a loss — marks a strategic retreat back to its investment banking core, signaling that not all experiments in reinvention are worth their cost.
As 2025 drew to a close, Goldman Sachs and Morgan Stanley stood as twin monuments to a Wall Street moment shaped by deregulation, deal-making hunger, and the collective imagination of investors chasing artificial intelligence's promise. Their double-digit profit surges — $4.62 billion and $4.4 billion respectively — reflect not merely corporate competence but the particular alchemy of a political and market environment that has rewarded financial complexity with uncommon generosity. Yet even in triumph, the story contains its contradictions: Goldman's quiet retreat from consumer banking, sold at a discount, reminds us that not every ambition survives contact with institutional identity.
Wall Street's two most prominent investment banks closed 2025 with commanding results. Goldman Sachs reported net earnings of $4.62 billion for the fourth quarter — a 12 percent year-over-year increase — while Morgan Stanley posted $4.4 billion, up from $3.71 billion the prior year. The numbers reflect how thoroughly the current environment has favored firms built around deal-making and market activity.
Two forces drove the gains. The Trump administration's rollback of financial regulations has unleashed corporate appetite for mergers and acquisitions, pushing Goldman's investment banking fees up 25 percent and Morgan Stanley's up 22 percent year-over-year. At the same time, investor obsession with artificial intelligence has created a parallel current of opportunity. Both banks reported swelling backlogs of pending deals — a reliable signal that momentum is likely to carry into 2026.
The broader banking sector shared in the rally, with JPMorgan Chase, Bank of America, and Citigroup all reporting fourth-quarter profit increases. But those larger, more diversified institutions face complications: White House interest in capping credit card rates and questions about Federal Reserve independence have introduced friction that tempered what might otherwise have been even stronger results.
Goldman also made a quieter, more revealing move — agreeing to sell its Apple Card portfolio to JPMorgan at a discount. The willingness to absorb a financial loss to exit consumer banking speaks to something deeper than strategy: it marks the end of an experiment that never fit Goldman's identity as an investment banking powerhouse, and a deliberate return to the work — advising, trading, managing — where the bank has always been most at home.
Wall Street's two largest investment banks closed out 2025 with commanding profit growth, their balance sheets swollen by a combination of market euphoria, corporate deal-making, and investor fervor around artificial intelligence. Goldman Sachs reported net earnings of $4.62 billion for the fourth quarter, a 12 percent increase from the same period a year prior, translating to $14.01 per share. Morgan Stanley, its rival, posted $4.4 billion in profit, up from $3.71 billion the previous year, or $2.68 per share versus $2.22 a year earlier. The gains underscore how thoroughly the investment banking sector has benefited from the current economic and political environment.
Two forces have been particularly generous to these firms. The Trump administration's push to roll back financial regulations has unleashed a wave of corporate appetite for mergers and acquisitions, sending deal-making teams across Wall Street into overdrive. Simultaneously, the market's obsession with artificial intelligence—and the companies positioned to profit from it—has created a secondary current of wealth and opportunity. Goldman's investment banking fees climbed 25 percent year-over-year, while Morgan Stanley saw a 22 percent jump in the same division. Both banks reported that their backlogs of pending deals, a crucial indicator of future revenue, swelled notably during the quarter, suggesting the momentum will persist into 2026.
The strength at Goldman and Morgan Stanley is part of a broader rally across the banking sector. JPMorgan Chase, Bank of America, and Citigroup all reported fourth-quarter profit increases this week. However, their gains came with complications. These larger, more diversified institutions have found themselves caught in a brewing conflict between Wall Street and the White House. The Trump administration has signaled interest in capping credit card interest rates at 10 percent and has raised questions about the Federal Reserve's independence—positions that have created friction with the banking establishment and dampened what might otherwise have been even stronger results.
Goldman Sachs, meanwhile, took a separate step that reveals something about its strategic priorities. The bank agreed to sell its Apple Card credit card portfolio to JPMorgan Chase, effectively abandoning its brief foray into consumer banking. The sale came at a discount, a telling detail that suggests Goldman was eager to shed the business regardless of the financial terms. The move marks the end of an experiment that never quite fit the bank's core identity as an investment banking powerhouse, and it signals a return to focus on the activities—advising on deals, managing investments, trading—where Goldman has historically excelled and where the current environment is most rewarding.
Citas Notables
Both banks reported that their backlogs of pending deals swelled notably during the quarter, suggesting the momentum will persist into 2026.— Goldman Sachs and Morgan Stanley fourth-quarter disclosures
Quieres la nota completa?
Lee el original en U.S. News & World Report ↗
Economy & Finance