Morgan Stanley equity traders score record quarter, eclipsing Goldman Sachs

Morgan Stanley delivered stellar performance in the third quarter ended September 30, 2025, with its equity trading division beating Wall Street expectations and successfully outperforming key rivals amid a surge in market activity.

According to the bank’s statement released on Wednesday, the firm’s stock trading income reached $4.12 billion, an increase of 35 percent on an annual basis. That result certainly beat analysts’ forecasts for a 6.6 percent increase and, more importantly, beat Goldman Sachs Group Inc.’s comparable figure of $3.74 billion. It’s a huge win for Morgan Stanley, which, under Chief Executive Ted Pick, has recently voiced ambitions to reclaim the top spot in the stock trading business dominated by Goldman.

In fact, Morgan Stanley’s stock investors had their best third quarter ever, surpassing their previous best second quarter. This record was driven in part by outstanding results in its prime brokerage divisions. Additionally, fixed income counterparts also posted strong growth, up 8 percent from the previous year and bringing total trading volume to $6.29 billion, well above the expected $5.5 billion.

Asset Management and Finance

The firm’s dominant asset management business also beat revenue estimates, generating $8.2 billion. The division reported a strong pre-tax profit margin of 30 percent after successfully attracting $81 billion in new customer assets.

But the unit faces an aggressive target: achieving $1 trillion in net new assets within a three-year period. To achieve this goal, Morgan Stanley needs to withdraw $232 billion in the last quarter of the year; This figure is almost three times the net assets achieved in the third quarter alone.

Overall, total revenue for the quarter came to $18.2 billion, easily beating the average analyst estimate of $16.6 billion. However, the strong revenue performance also brought a warning of higher-than-expected spending. Compensation costs totaled $7.44 billion, bringing total noninterest expenses to $12.2 billion. This represented a 10 percent increase from the previous year, beating analysts’ expectations for a 6.8 percent increase.

Strategic Focus and Market Response

Morgan Stanley shares rose 4 percent in premarket trading in New York, reflecting investor confidence. The stock is already up 24 percent for the year through Tuesday.

Investors’ attention has focused on how CEO Pick plans to use the firm’s capital, especially after Morgan Stanley secured a lower capital requirement from the Federal Reserve last month.

In July, Mr. Pick stated that the firm was actively reviewing “inorganic opportunities” but argued that “the bar is too high.”