Economy

Goldman Sachs and Morgan Stanley beat profit estimates, driving stock gains

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Jan 16, 2026

THE BARE STORY

Goldman Sachs and Morgan Stanley reported fourth-quarter financial results on Thursday that exceeded profit expectations, leading to significant share price increases for both Wall Street institutions.

Goldman Sachs posted a 12% rise in profit to $4.62 billion, or $14.01 per share, surpassing analyst estimates. However, the bank’s total revenue dipped 3% to $13.45 billion. The firm attributed the revenue decline to financial impacts from offloading its Apple Card loan portfolio to JPMorgan Chase and the early termination of its partnership with Apple. Despite this, the bank’s equities trading division outperformed, generating $4.31 billion in revenue, a 25% increase from the previous year.

Morgan Stanley reported net income of $4.40 billion, or $2.68 per share, on revenue of $17.89 billion, beating expectations on both measures. The results were driven by the company’s wealth management unit, which achieved record annual net revenue, and a rebound in investment banking. Investment banking revenue surged 47% to $2.41 billion, which the firm credited to higher advisory fees resulting from increased merger and acquisition activity.

Following the earnings releases, both banks saw their stock prices reach new 52-week highs. By the close of trading on Thursday, Morgan Stanley shares had gained 5.78%, while Goldman Sachs shares rose 4.63%.

During an earnings call, Goldman Sachs CEO David Solomon also revealed that the bank is actively exploring opportunities within prediction markets. Solomon stated that a dedicated team is studying platforms that allow investors to trade contracts based on event outcomes, noting that oversight by the Commodity Futures Trading Commission makes the sector "super interesting" for potential integration.

Same Facts. Different Perspectives.

Two AI models. Two viewpoints. One factual foundation.

Perspective by Claude

• Profit expectations surpassed and stock prices surged Both Goldman Sachs and Morgan Stanley reported fourth-quarter results that beat analyst estimates for profit. This strong financial showing catalyzed a rally in the stock market, pushing shares of both Wall Street institutions to new 52-week highs by the close of trading on Thursday.

• Morgan Stanley achieved broad growth across key sectors The bank reported net income of $4.40 billion, driven by record annual net revenue in its wealth management unit and a rebound in investment banking. Investment banking revenue specifically surged 47% to $2.41 billion, a rise the firm credited to increased advisory fees stemming from higher merger and acquisition activity.

• Goldman Sachs delivered robust equity trading results Despite challenges in other areas, the bank’s equities trading division significantly outperformed previous metrics. The division generated $4.31 billion in revenue, marking a 25% increase compared to the prior year and contributing to the firm's overall 12% rise in profit.

How it may affect me

As a U.S. reader:

• Investment portfolios exposed to the financial sector may increase in value as Goldman Sachs and Morgan Stanley stocks hit 52-week highs following strong profit reports.

• Apple Card users will see the management of their loans shift to JPMorgan Chase as Goldman Sachs unwinds its consumer finance partnership with Apple.

• The corporate sector may experience increased consolidation, as indicated by Morgan Stanley's 47% surge in investment banking revenue driven by higher merger and acquisition activity.

• Traders may eventually gain access to regulated platforms for betting on event outcomes as Goldman Sachs explores opportunities within prediction markets.

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