This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

WMA 2024-Morgan Stanley

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

WMAC 2023-Morgan Stanley

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-061-Morgan-Stanley

The investment bank and financial services company saw modest revenue growth in 2022, but its profits slumped as dealmaking dried up in a rocky economy. 
<ul> 
 	<li>The bank reported $65.9 billion in revenue in 2022, up 8% from the year prior.</li> 
 	<li>Morgan Stanley’s profits dipped 27% to $11 billion as the firm’s investment banking arm struggled amid high inflation and a scarcity of M&amp;A deals.</li> 
 	<li>After some layoffs in 2022, the firm is reportedly planning more job cuts—3,000 or so—for 2023, with its banking and trading units enduring most of the reductions.</li> 
 	<li>James Gorman, the company’s CEO since 2010, announced in May that he would step down within the next 12 months. The company did not immediately name a successor.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-Morgan Stanley

Banks had a great 2021, and Morgan Stanley was no exception. The bank posted record net revenues (up 23%) and net income (up 37%) for the year, and its wealth management division added $1 trillion to client assets. Morgan Stanley also advised on several significant and big-ticket mergers this year, including Canada Pacific Railway’s $31 billion acquisition of Kansas City Southern to help create a Canada-U.S.-Mexico rail network. (The deal’s final approval was pending regulatory review as of May 2022.) The rate of mergers and acquisitions dropped significantly in the first few months of 2022, however, as geopolitical concerns and inflation left investors and corporate leaders feeling skittish.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-204-Morgan Stanley

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;What pandemic? Morgan Stanley appeared to weather the shutdowns seamlessly, even though CEO James Gorman was diagnosed with the coronavirus in March 2020. Boosted by surging capital markets (and without a consumer business to weigh it down during the lockdowns), revenue rose 16% to $48.2 million. The strong results seem validation of the bank’s decisions to spend billions of dollars doubling down on its brokerage and wealth management segments: In 2020, the bank acquired digital brokerage E*Trade for $13 billion and announced plans to acquire investment management firm Eaton Vance for $7 billion. The company’s upward trajectory hasn’t exactly been consistent, however. The bank lost about $911 million in the first quarter of 2021 owing to the collapse of family office Archegos Capital Management. While the firm still posted a record profit for the quarter, the incident is likely to present further challenges as regulators prod why financiers (including Morgan Stanley) had so much riding on a single client. \n&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">What pandemic? Morgan Stanley appeared to weather the shutdowns seamlessly, even though CEO James Gorman was diagnosed with the coronavirus in March 2020. Boosted by surging capital markets (and without a consumer business to weigh it down during the lockdowns), revenue rose 16% to $48.2 million. The strong results seem validation of the bank’s decisions to spend billions of dollars doubling down on its brokerage and wealth management segments: In 2020, the bank acquired digital brokerage E*Trade for $13 billion and announced plans to acquire investment management firm Eaton Vance for $7 billion. The company’s upward trajectory hasn’t exactly been consistent, however. The bank lost about $911 million in the first quarter of 2021 owing to the collapse of family office Archegos Capital Management. While the firm still posted a record profit for the quarter, the incident is likely to present further challenges as regulators prod why financiers (including Morgan Stanley) had so much riding on a single client.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-61-Morgan Stanley

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-203-Morgan-Stanley

Since the 2008 financial crisis, Morgan Stanley has increasingly leaned on its wealth management business as a steadier revenue source than trading or investment banking. Morgan Stanley has doubled down on the strategy with success: Last year wealth and investment management grew to 51% of the company's revenue, compared to 26% in 2010. Now the bank is spending billions to capture a younger, more tech-savvy clientele. In February 2019, Morgan Stanley acquired Solium Capital, which helps manage stock compensation plans for the likes of Instacart, Stripe, and Shopify, for $900 million. In early 2020, the bank titan made an even larger play for the masses by acquiring discount brokerage E*Trade Financial for $13 billion—putting it head-to-head with the likes of Charles Schwab and Robinhood.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-061-Morgan-Stanley.

Since the 2008 financial crisis, Morgan Stanley has increasingly leaned on its wealth management business as a steadier revenue source, rather than on trading and investment banking. Morgan Stanley has doubled down on the strategy with success: Last year wealth and investment management grew to 51% of the company's revenue, compared to 26% in 2010. Now, the bank is spending billions to capture a younger, more tech-savvy clientele. In February 2019, Morgan Stanley acquired Solium Capital, which helps manage stock compensation plans for the likes of Instacart, Stripe, and Shopify, for $900 million. In early 2020, the bank titan made an even larger play for the masses by acquiring discount brokerage E*Trade Financial for $13 billion—putting it head-to-head with the likes of Charles Schwab and Robinhood.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Morgan Stanley is an investment bank and financial services firm. Its revenues are split between securities and wealth management; its securities business includes investment banking, underwriting, and advice on mergers and acquisitions. Its prominent subsidiaries include the self-directed investing platform E*Trade and the investment management firm Eaton Vance.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Morgan Stanley (MS): Company Profile, Stock Price, News, Rankings

legacy

Morgan Stanley

morgan stanley

Good morning. Welcome to Morgan Stanley's Fourth Quarter and Full Year 2025 Earnings Call. On behalf of Morgan Stanley, I will begin the call with the following information and disclaimer. This call is being recorded. During today's presentation, we will refer to our earnings release, financial supplement, and strategic update, copies of which are available at morganstanley.com. Today's presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially.

Please refer to our notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release and strategic update. Within the strategic update, certain reported information has been adjusted as noted. These adjustments were made to provide a transparent and comparative view of our operating performance.

The reconciliations of these non-GAAP adjusted operating performance metrics are included in the notes to the presentation or the earnings release.This presentation may not be duplicated or reproduced without our consent. I will now turn the call over to Chairman and Chief Executive Officer Ted Pick. Ted, you may proceed.

Good morning and thank you for joining us. In 2025, the U.S. economy proved resilient as ever. As predicted, the capital Markets are kicking in with well-capitalized corporates and higher-end consumers driving the economy forward. 2026 starts with the tailwinds of constructive fiscal policy and easier monetary policy. As the arc of history resumes, geopolitics are front and center with a broadening set of opportunities and challenges.

While the higher plane of Morgan Stanley results tell a story of durable performance, we are mindful of the combination of geopolitical swirl and nebulous markets. The macro backdrop is complicated. On the one hand, the setup is ideal. We are monetizing the long-awaited conversion of capital markets' green shoots across our Investment Banking and Markets verticals, and we are scaling asset inflows and transaction activity across our Wealth businesses.

At the same time, we are well served to watch for any overreaching against ongoing global uncertainties and higher asset prices. 2025 results, and in fact, the results for every quarter over the last eight, are a blueprint for Morgan Stanley's success. We expect this mix of tailwinds and headwinds to prevail in 2026 and are prepared to continue to execute. We will now walk through the 2026 strategy deck entitled "The Integrated Firm: Executing on a Higher Plane," which can be found on the Morgan Stanley website. We will then detail fourth quarter and full year results.

Turning to slide three, Morgan Stanley's 2025 results are summarized by $9.3 trillion in total client assets, $10.21 in earnings per share, and a 21.6% return on tangible. The firm's trusted advisor franchise delivered across all three metrics.

Slide four shows that our average earnings per share and returns on tangible over the last decade reflect the transformation of Morgan Stanley's business model. The last five years are the result of share gains and operating leverage via consistent investment in technology, footprint, and the successful integration of key strategic acquisitions. Moving to slide five, we are well on track toward our firm-wide goals. We've compounded Wealth and Investment Management client assets toward $10 trillion plus.

In Institutional Securities, we gained 100 basis points of wallet share with clients across Investment Banking and markets, reflecting the strength of our integrated investment bank and global franchise. Please turn to slide six. We've moved up the firm-wide goals page for review in the context of the last two very strong years. 2025 results in the fourth quarter, or on an annual basis, broadly met or exceeded our firm-wide goals.

Asset growth accelerated with last year's additional $1.4 trillion. Wealth's pre-tax margins are at their highest levels ever, with the fourth quarter's 31% printed result. Institutional securities gained share across underwriting and equities trading, and we closed the year with a strong advisory result. In short, the firm is running at a higher run rate. We are executing from a position of strength: multi-year investments in the core businesses, client momentum, management stability, and growing capital excess.

But as I observed in the opening, there are both macroeconomic and geopolitical tailwinds and headwinds. And in our view, while we are happy to have reached many of these firm-wide goals, perhaps earlier than some expected, this is not the time to overreach. These last eight quarters memorialized consistent execution against different mini-macro uncertainties, and our multi-year growth plan contemplates both secular growth and available wallet and continued durable share gains.

Our expectation going forward is that if this environment is welcoming, we are meant to execute at or above these firm-wide goals, as we did in 2025, and when the backdrop is more challenged to endeavor to achieve higher lows. The longer-term cadence we seek is a higher plane of operating performance through the cycle as we compound earnings in a capital-efficient way. Now to the forward growth plan. Please turn to slide seven, where we review our major businesses. As you know, Wealth has three channels.

Our financial advisors, Workplace, and E*TRADE, each a category leader, which taken together comprise our strategic client acquisition model. In institutional securities, we have deep client relationships and a global footprint under the integrated investment bank. We have diversification in Investment Management led by Parametric, alternatives, and fixed income.

We continue to invest in each of our three business segments: Wealth, Institutional Securities, and Investment Management via human capital and technology. Our growth plans embed the increasing adoption of AI tools throughout the enterprise and inside our client base. With each passing quarter, our confidence continues to increase in the potential for both the efficiency and the effectiveness of AI-related technologies across the business units and infrastructure. Slide eight. Our Wealth Management business is built for scale and performance.

The financial advisor workplace and E*TRADE retail channel are each thriving. The business had net new assets of over $350 billion last year. Over the last five years, the firm attracted $1.6 trillion plus of net new assets with a doubling of fee-based flows. For 2025, Wealth achieved $32 billion in revenues, 29% margins. The funnel is working. Please turn to slide nine.

With 20 million Wealth relationships, future growth is embedded in the business. Our intense focus on the value of advice, which generates movement through the funnel, allows us to capture opportunities for advisor-led assets. In 2025, we saw accelerating flows across channels with $100 billion migrating to financial advisors. We are using our scale to invest in broadening capabilities for FAs that are difficult for others to replicate: alternatives and privates, tax-efficient investing, digitized assets, family office and OCIO, and tailored lending.

Collaboration across the integrated firm is felt by clients for both their corporate and personal wealth needs. Slide 10 dives deeper into Institutional Securities. We have an established global footprint and revenue base. Banking and markets gained wallet share delivering margins of 34%.

Revenue growth supported by the recovery in Investment Banking is running roughly two times SLR and RWA growth since 2023, reflecting our continued focus on capital efficiency and operating leverage. Turning to slide 11, the Institutional Securities value proposition is reflected in the integrated investment bank. We approach client coverage holistically and provide comprehensive solutions with the support of integrated teams.

The collegiality and Morgan Stanley tenure of the leadership teams across banking and markets, on average about 25 years at the firm, is critical in bringing the best of our intellectual capital to clients. The themes of the equitization of global markets and the full suite of expertise to advise on cross-border M&A are at our global core. ISG share gains position us well for the global Investment Banking and capital markets cycle in 2026 and beyond. Please turn to slide 12.

In Investment Management, we continue to benefit from secular growth and investing solutions and the democratization of alternatives. Parametric is the industry leader in tax-efficient investing at $685 billion in AUM and stands to benefit as more clients and asset managers seek customized solutions. Our alternatives platform has more than doubled in five years, with investable assets now at $270 billion. These and other areas of strength are supported by ongoing investments in technology and global distribution.

Slide 13 underscores Morgan Stanley's global presence. We have 30,000 people outside the U.S. in every business unit and large tracts of infrastructure. 25% of our revenues this year came from outside the U.S., with EMEA growing revenues by 40% and Asia by 50% over the last two years.

We have leading businesses in Japan, thanks to our almost 20-year joint ventures with our close partner, MUFG, and a world-class business in Hong Kong. We have grown in the EU and maintained leadership in the U.K. In a world that is both deglobalizing and re-globalizing, our presence and footprint matter. Slide 14 illustrates why Morgan Stanley wins as the integrated firm. We have scaled capabilities and a business mix that can support our clients throughout an entire life cycle.

Our Morgan Stanley at Work business, with its exclusive partnership with Carta, positions us as an early trusted advisor to over 50,000 private companies. As workplace companies grow, we can provide traditional institutional servicing. Employees across our workplace companies benefit from our management of equity compensation plans, liquidity opportunities, and our full-service advice.

We are focused on both the public and the private ecosystems, augmented by our recent acquisition of EquityZen. The objective is to cover growth companies and their employees from founding to their public maturity while broadening access for investors to the growing stack of private companies. Again, our technology leadership and wealth enables us to deliver a holistic client experience. Please turn to slide 15. Our durable business model and strong earnings profile have kept capital levels high during a period where the regulatory capital framework has normalized.

As we have grown fee-based revenue streams, our regulatory minimum CET1 ratio has steadily come down. At a CET1 ratio of 15%, we have over 300 basis points of excess capital. With the passage of time, the continued durability of the business model may be enhanced by further regulatory relief. Prudent dividend growth comes first.

Accordingly, we have raised our quarterly dividend by $7.50 for four years in a row to now $1 per share. As we've discussed in previous years, excess capital will be directed to continued dividend growth and to ongoing investment in clients and technology across the integrated firm. We will also continue to opportunistically buy back stock. We are keeping full watch on potential M&A adjacency, but we will continue to be patient.

Because we have worked diligently through the acquisitions of Smith Barney, Solium, E*TRADE, and Eaton Vance over the last 15 years, we know what level of focus and energy is required across the entire firm to make a multi-year integration successful.

In short, we are endeavoring to keep the bar for acquisitions high, bearing in mind that many asset classes, private and public, trade at elevated levels, that there is no shortage of ongoing opportunities, and that the first call on capital must be to our clients and the continued growth of our core businesses. Concluding with slide 16, we're supported by our four pillars of the integrated firm: strategy, culture, financial strength, and growth. Morgan Stanley's strategy to raise, manage, and allocate capital is well understood by our clients, people, and our shareholders.

Culture is about rigor, humility, and partnership. Financial strength is about capital, earnings power, and durability. And growth is about smart, strategic investment into wealth, Institutional Securities, and Investment Management, and across the firm globally. The result is growing assets and compounding earnings in a capital-efficient way over the long term. Thank you.Now, Sharon will review our fourth quarter and annual results, and then we will both take your questions.

Thank you and good morning. 2025 was an exceptional year for the firm, marked by deliberate execution of our strategy. Full-year revenues reached a record of $70.6 billion, and the fourth quarter revenues were $17.9 billion. Expanding markets, increasing client demand for advice, and improving client engagement supported results across businesses.

Concurrently, multi-year investments in our talent, the integration of acquisitions, workplace, and the integrated firm have significantly contributed to growth and momentum. Our ROTCE was 21.6%, and we generated record EPS of $10.21 for the full year, alongside fourth quarter ROTCE and EPS of 21.8% and $2.68, respectively. In 2025, we delivered operating leverage while continuing to invest for future growth and advancing productivity initiatives firm-wide. Our full-year efficiency ratio improved to 68.4%, underscoring disciplined execution and rigorous prioritization of investments.

Now to the businesses. Institutional Securities delivered a record full-year revenues of $33.1 billion, including $7.9 billion in the fourth quarter. We continue to invest in our global footprint and capabilities, resulting in competitive advantages and industry leadership. A strong macro backdrop, improving corporate confidence, and open capital markets position us well to continue to capture durable share. Investment Banking revenues were $7.6 billion for the full year, reflecting year-over-year growth across products and regions.

Fourth quarter revenues of $2.4 billion increased 47% from the prior year. Results were led by a record in debt underwriting and advisory crossing $1 billion for the second strongest quarter ever. Corporates leaned into constructive financing conditions to fund strategic priorities, while sponsors were also active, completing previously announced M&A transactions. Equity issuance led by convertibles and IPOs remained strong, driving consistent results in equity underwriting.

Looking ahead to 2026, Investment Banking pipelines remain healthy, global, and diversified across sectors. Strategic activity is accelerating. Companies and sponsors are looking to access capital for growth investments, and the reopening of the IPO market creates additional opportunities for clients. Turning to equity, the business delivered record full-year revenues of $15.6 billion. Our global share gains this year were driven by increased client engagement and dynamic risk management. Revenues were $3.7 billion in the quarter.

All businesses were up versus the prior year's fourth quarter on the back of higher client activity. Prime brokerage revenues drove the fourth quarter's results. Client balances continued to rise, supporting the outlook for financing revenues. Cash results increased versus last year's fourth quarter, reflecting higher volumes across regions. Derivative results were up versus last year's fourth quarter as well, benefiting from our consistent investments in our client franchise and product offerings.

Fixed income revenues were $8.7 billion for the full year. Importantly, investing in our lending businesses has contributed to increased consistency and stability of our franchise. Quarterly revenues were $1.8 billion. Micro and macro results declined versus the prior fourth quarter, reflecting lower volatility in foreign exchange and weaker performance in credit corporates. Commodity results declined, primarily due to lower power and gas revenues, which had benefited from several large structured transactions in last year's fourth quarter.

Turning to Wealth Management, 2025 demonstrates the consistent execution of our strategy. We delivered full-year records across revenues and reported margins, reaching $31.8 billion and 29%, respectively. Both net new assets of $356 billion and fee-based flows of $160 billion for the full year demonstrate industry-leading growth. Workplace and E-Trade relationships continue to seek out advice.

Advisor-led assets originating from workplace and E*TRADE relationships accelerated, growing to a record $99 billion for the full year, compared to historical averages of around $60 billion per year. Moving to our business metrics for the fourth quarter, record revenues reached $8.4 billion, and the business delivered strong operating leverage, with the reported margin expanding to 31.4%. DCP negatively impacted the quarterly margin by approximately 95 basis points.

Asset management revenues were a record $5 billion, benefiting from expanding markets and consistently strong fee-based flows. This marked our third consecutive quarter of fee-based flows exceeding $40 billion, a first for this industry. Transactional revenues were $1.1 billion. Elevated activity across both advisor-led and self-directed clients drove the strength. Additionally, net new assets for the quarter were robust at $122 billion, with contributions across all channels. Growth was supported by institutional relationships related to the integrated firm.

Bank lending balances grew $7 billion sequentially to $181 billion, driven by securities-based lending and mortgages. Growth reflects our efforts to deepen client penetration with SBLs, leveraging technology to improve automation and facilitate the client acquisition openings, as well as increasing education with our advisors and our clients. Sequentially, total period deposits grew $10 billion-$408 billion, and net interest income increased to $2.1 billion. The growth in NII was driven by the increase in sweep deposits and loan balances.

Looking ahead to the first quarter, we expect NII to remain roughly flat quarter over quarter, as higher average sweeps and lending balances should help to offset the full impact of the two rate cuts in the fourth quarter.

As we look ahead to the remainder of 2026, assuming the current forward curve, incremental loan growth, and our projections for the deposit mix, we expect NII to continue to trend higher. Before concluding, one update on DCP. Over the course of the first quarter, we will be transitioning all economic hedges for DCP obligations to derivative instruments. As previously announced, we will also increase the cash component of our advisor compensation. We are making these changes to reduce the accounting-driven volatility in revenues and earnings.

While there will be some transitional costs, these changes support our overall investment into our financial advisors and will help simplify our compensation program. The full year, inclusive of momentum in the fourth quarter, exemplified our strategy to reach new relationships, grow assets, and deliver advice solutions to clients.

Strategic initiatives such as our recent acquisition of EquityZen, expanded partnership with Carta, and collaboration with Zero Hash all reflect our commitment to innovation. Together, they lay the foundation for sustainable growth to widen our competitive moats. Our intentional strategy to introduce and educate retail clients to the value of advice, coupled with consistent education over the past several years, sets our franchise apart and positions us to continue to outperform.

Turning to Investment Management, our franchise delivered strong results this year, with durable management fee revenues reaching all-time highs. The margin continued to steadily improve. Total revenues were $6.5 billion, and we scaled to a record $1.9 trillion in AUM. The business has now generated six consecutive quarters of positive long-term net flows, with ongoing demand for parametric and fixed income strategies supporting the full-year long-term goal net inflows of $34 billion.

Long-term net inflows were approximately $2 billion in the quarter. Importantly, our broadened portfolio helped offset equity outflows, benefiting from the consistent strength in fixed income, parametric, and global distribution. Liquidity and overlay services saw $68 billion of inflows for the quarter, driven by institutional demand, some of which may be seasonal. Fourth quarter revenues were $1.7 billion, driven by higher asset management and related fees on higher average AUM.

As a reminder, certain performance fees are recognized on an annual basis, largely in the fourth quarter, which drove the sequential increase. Performance-based income and other revenues were $71 million in the quarter. Gains in U.S. private equity and private credit more than offset markdowns in our infrastructure fund. Turning to the balance sheet, total spot assets were $1.4 trillion. Standardized RWAs increased sequentially to $553 billion. Our standardized CET1 ratio ended the year at 15%.

For the full year, we bought back $4.6 billion of common stock, including $1.5 billion for the quarter. Our tax rate was 21.5% for the full year and 23.2% for the quarter. We expect our 2026 tax rate to be between 22 and 23%. And consistent with prior years, we do expect some quarterly volatility. As we look ahead into 2026, the firm enters the year from a position of strength. Our wealth and Investment Management businesses exited with $9.3 trillion in total client assets.

Client engagement remains high. Our pipelines are healthy, and our global footprint positions us well to continue to deliver advice and solutions across markets. We remain focused on investing for the future and scaling our business to perform through various market environments. With that, we will now open the line up to questions.

We are now ready to take questions.To get in the queue, you may press star and the number one on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star and the number two on your touch-tone telephone. We'll take one question at a time, and then we'll move to the next person in the queue. Please rejoin the queue for any additional questions. Please stand by while we compile the Q&A roster. We'll take our first question from Glenn Schorr with Evercore.

Hi. Good morning. Okay. The results are pretty great across the board. And I think I appreciate your comments about environment, risks. You're a conservative guy. You're a risk manager. I do think people would love to hear a little bit more about why no change for the targets.Are there pieces of the business that you think are just at peak and over-earning, and we don't want to set ourselves up? The market's up 80% for the last three years. And then just cyclical caution, basically, versus anything underneath secularly. So thanks so much.

Well, I think that's the important question for the day. We had a robust conversation about it, but in the end, the decision was really pretty easy. I think the view is that the shareholders ultimately want to see an enterprise that can operate at high levels with the kind of ballast that you began to see over the lows in the last decade, and that on the forward, we can achieve effectively higher lows. And I think the tendency has been when a target is hit, the view would be, "Well, we hit it.Let's take it up further," and there is no view that the net wins are headwinds.

They are, in our view, secular and cyclical tailwinds that work for us, both in terms of wallet and in terms of market share across all of the major businesses, and we have even more operating efficiency that we think we can continue to garner from the infrastructure by way of AI over time, but I think part of the premise of rigor and humility at our place is that we do this in a way where we compound earnings again and again right through the cycle, and of course, we will revisit these targets in the latter years to come, and if then we've passed through them very clearly and it's time to take them higher, we will certainly consider that, but I think the view is we're a couple of years in.

Each of the quarters has been, by many measures, quite excellent. The two years taken together, each on their own and then taken together, also excellent. I think mistakes that I'll make, Glenn, this won't be one of them, which is to kind of hit the new target slide at the beginning of year three because we're feeling our oats. I think we have a very positive view of where the firm is positioned.

We like the spaces we're in, but we think that demonstrating our ability to compound earnings through the cycle is what the owners want to see, what you want to see.That when things are bumpier, they're choppier, we'll have higher lows. If we can continue to compound earnings at 20% returns, we're going to have happy owners.

We'll move to our next question from Dan Fannon with Jefferies.

Good morning. So I guess just to follow up on that, given the success of the Wealth Management business, can you talk about the drivers of the margin from here? Is it just scaling and growth of the business, or are there things underneath from a cost or efficiency perspective that we should think about or a mix of business that can drive those margins higher?

Thank you so much for the question. I think it's both. We have consistently added fee-based flows. That is demonstration that the funnel is working. So from the revenue line items, right, the drivers of continued expanded margins are twofold. One is building out the fee-based revenues and the fee-based assets. And that is happening as we do introduce new clients to the power of the advice-based model. But there are also clients who just want self-directed activity.

And we have been investing in that business in the E*TRADE franchise, in E*TRADE Pro. And you see that our transactional revenues are also increasing. So that's an investment story in technology. And the second piece that you mentioned is efficiency. We are also using technology to help us from an efficiency perspective, both on the cost and the revenue side. I'd note to you that some of the AI that we've been doing is actually also on the revenue side.

So LeadIQ, for example, which is helping us introduce our advisors to our clients who are interested in advice, that's happening using AI. So there's technology that can be used both on the revenue side and on the expense side that should help us drive the margin on both the top and the bottom line.

Workplace is particularly exciting as a way to bring the entire enterprise together to help drive both the corporate client base and personal wealth into a broader Morgan Stanley funnel. So that plank of the funnel has been particularly extraordinary.

We'll take our next question from Brennan Hawken with BMO Capital Markets.

Excellent. Sorry to be a little repetitive, but I'd love to have another question here on the targets because it does seem as though we've got maybe a shift in how you guys are thinking about them. And you made some comments around, "I totally get it," and I wanted to chase the dragon, right, and continuing to raise the targets and think about what the peak could look like. You spoke to higher lows in addition to higher highs.

So is the right way to think about how you're framing the targets and how you're thinking about managing the business as more like a central tendency through the cycle, or is it even feasible, as you continue to scale, to think about how this might be? You never want to use terms like floors in businesses like you have because of the market sensitivity and whatnot, but potentially what you could be looking to do even in more challenging markets as we continue to progress forward. Thanks for taking my question.

Sure. There is a chasing the dragon element to this, of course. You hit some of the targets once, and you feel you got to sort of bump and raise. We want this to work organically over the very long term.This is part of the reason on slide four we put up a decade of results, the areas of locality in the business. There is no philosophical frame shift, though. I think we just now have the kind of confidence where we can start talking about what it would be like if there was a more challenging environment and our ability to still generate 17.5% returns on tangible with an environment where earnings could be below $8.

We don't have that in the plan, but it is an important ballast when we think about the earnings multiple that you put on the currency, that there's a view that we can continue to generate real leverage, operating leverage through performance in tougher periods.That is a tough thing to tell the market you have confidence in unless you've done eight quarters, as we have in these sort of mini macro uncertain periods where we've been able to see performance driven by the two major segments separately and then together.

It is the case, though, that with the compounding of earnings and the continued growth of these businesses, it is quite possible that we are going to be moving right through these firm-wide goals. By definition, the math should take us through the $10 trillion. It's compounding math. And you've seen our performance on that score over the last several years. And we printed wealth margins that were, in fact, above 30%. We continue to gain share inside the investment bank. As Sharon went through, we had margins for the enterprise, i.e., efficiency ratio that was below 70%, and our ROTCE was 21%-22%.

So we demonstrated it, just not in our prudent kind of long-term thinking that is the Morgan Stanley of today, that we should just move the targets higher because we've had a couple of good years. I think the view is we are going to continue to compound earnings. We are going to not push on robust objectives when, in fact, 20% returns are pretty darn good if we're continuing to gain wallet and secure market share in the businesses that we care about, whether they are in core Investment Banking and the mergers business.

You see our advisory number was excellent this quarter in our equities business, which has become, again, the kind of competition that it was some years ago where the leadership group is moving away from the pack in fixed income secure lending, where we have a great client touching business, and then really across that wealth funnel, which is really quite extraordinary.

So there is an element of we're going to keep our heads down and execute as opposed to kind of here are some targets just to get everybody excited in the moment, and then let's see if we ever hit them. I think our view is let's hit them again and again to the point where it kind of gets louder, like, "When are you guys going to take this up?" Because it's sort of a no-brainer for you now.

And when we get to that point, that'll be a happy day. But in the meantime, let's compound earnings. Let's do it the right way. Got a lot of long-term plans around the durability of the business model. And we're playing for the multiple too. As you know, it's the P and the E. And part of the way to get a premium multiple, earnings multiple in the marketplace is to demonstrate our ability to say what we're going to do and just go out and do it again and again.

We'll move to our next question from Devin Ryan with Citizens Bank.

Thanks. Good morning, Ted. Good morning, Sharon.

Question on institutional trading. Obviously, wrapping up another great year for the firm, up 16%, and that's coming off of 19% growth in 2024.And clearly, Morgan Stanley, you guys are executing on your wallet initiatives and gaining share. But as we look ahead into 2026, can you help us think about some of the puts and takes of just assessing kind of the trajectory of the wallet? Just trying to think about kind of the baseline here after two really good years. Can the wallet continue to expand and kind of the secular dynamics versus the cyclical? Thanks a lot.

Yeah, we like the tailwinds. Sharon will improve my answer here. We really like this business. I think one of your colleagues likes to ask sometimes what inning we're in. I think in the capital markets business as a whole, I kind of put us in the third inning. Now, there are sort of exogenous outs, sort of, as I said, the geopolitical swirl.

But the reality is the equitization of markets around the world is underway. It's why we put in the slides on the global presence that we have. It's not that we're trying to be all things to all people. Where we are good, though, we wish to be very good. So we are differentiated in Tokyo. We are differentiated in Hong Kong. Hong Kong was the busiest issuer of equity in the world over the last year. That will continue. And of course, we have the sweet spot in the U.S. So there is a global theme to this.

But as we talked about on prior calls too, there have been reasons why there has been some sort of stuck boardroom mentality, understandably, as we went into the pandemic and then we came out with rates having to rise to try to combat inflation.But I think now there is really no more time to waste. The reality is that AI is now taking hold endogenously, and you need to actually have some real scale to be able to defuse the teething of putting that into your core business. And so we should see consolidation. And the sponsors are just getting going.

They are having bought some time and taking a look at what they want to keep and what they want to run through markets. They are beginning to unglue their asset base. And then, of course, we have very large private companies that are wildly successful that are probably going to start bridging to going public. So I'm starting there because that's all about Investment Banking.

And then in the equity space, rates that are above the zero floor, foreign exchange that starts to trade, and then importantly, the institutionalization of the private credit class all speak to vibrant capital markets. And as you know, we are a full-service stockhouse, M&A, Wealth Management, and then equities. And clearly, getting our footing to be number one or number two in the equities business in a given quarter has been a priority of ours to do it the right way with clients.

And importantly, within that, the growth of the derivatives business, a relative weakness of Morgan Stanley relative to the top-tier competitors, a lot of that has now been erased. So we actually are coming across now as a derivatives house as well for clients.

So I like what Dan has done quite brilliantly with the Integrated Investment Bank, which is sort of take it up another notch with clients right into the cycle where we have the global footprint and where we are ready to put capital to work, as Sharon said, in places like M&A acquisition financing, prime brokerage, fixed income, securities lending, and other durable businesses that accrete to the broader integrated firm.

And then my last comment would be the beauty of this, and you heard it woven into my slides and Sharon's commentary, is that a whole bunch of what we're talking about has application across both the institutional and wealth client set. Stock administration side of workplace has appeal both for the CEO and then for that firm for their Wealth Management business. So we're quite excited about it.

The old rule of thumb is two times GDP. I would think two times GDP is not a bad way to go. Nominal GDP even. So you could see the wallet in this business continuing to grow by anywhere between 5%-10% per annum. And then, as you can see, we are continuing to gain share from some of the lesser firms that have incomplete offerings, which should augur well for the largest established firms, frankly, the ones that reported this week being the ones to thoughtfully gain share here over the next number of quarters.

We'll move to our next question. Sorry, go ahead. We'll take our next question from Mike Mayo with Wells Fargo Securities.

I was going to ask you what inning you're in, but I think you just answered that.

Well, it's the wrong season too, so maybe I can put it in football terms. I don't know.

How about this? Maybe just ask the question again, and then I pick a softball.

Look, as it relates to trading, I get Investment Banking and the equitization of markets globally, the institutionalization of the private credit class. And I think that kind of probably hits the mark. But the trading side is what I think people wonder about. You always put a forecast in there, and it doesn't always turn out so correctly.

And so how do you think about the trading business? You had unusual volatility last year. And when you say third inning, maybe it's the first or second inning for IB and eighth inning for trading, or how would you characterize that?And then as an overlay, how do you think about the AI opportunities and risks as it relates to your business?

Oh, that's sort of interesting the way you put it. So I'll do the first part, Sharon. I'll do the second part. Yeah, I could argue that the trading businesses in some respect have to be viewed if you just we were to look back on the earnings prints years from now, maybe they're in middle innings simply because we've had this huge move in asset prices. So by definition, you're off higher notionals, and there's gross leverage, and you've seen real sort of capital accumulation in places where we can monetize.

Morgan Stanley (MS) Q4 2025 Earnings Call Transcript

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