AI stock frenzy drives record revenue at Morgan Stanley, capping big bank earnings blowout

An AI-powered trading and dealmaking binge boosted profits 58% astatine Morgan Stanley (MS) successful the 2nd quarter.

On Wednesday, the Wall Street slope reported nett income of $5.58 billion, oregon $3.46 per share. Net gross soared 27% from the year-ago play to $21.35 billion. Both net per stock and gross are grounds highs for Morgan Stanley.

Quarterly banal trading fees roseate 69% from the twelvemonth agone play to $6.3 billion, besides the highest successful the firm's history. Its equity underwriting businesses churned retired $851 million, a 70% leap twelvemonth implicit twelvemonth and the highest since 2021.

The institution exceeded expert estimates for nett income and revenue, capping disconnected a banner week for Wall Street's biggest banks. JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Bank of America (BAC), and Citigroup (C) each reported net that surpassed expectations connected Tuesday.

Together, these six large banks earned astir $55 cardinal successful the 2nd quarter, a 37% leap a twelvemonth earlier.

Morgan Stanley CEO Ted Pick called the results "exceptional" successful a property merchandise statement.

"We proceed to accrete capital, giving america incremental flexibility to put successful our halfway businesses portion generating beardown returns for shareholders," Pick added. 

Morgan Stanley's banal terms roseate successful aboriginal Wednesday trading aft closing astatine a grounds precocious connected Tuesday. Since the opening of January, the banal has climbed much than 24%, outperforming its rivals.

The AI roar is turbocharging a rhythm of Wall Street activities. More trading enactment by institutions and retail investors is generating grounds quarters for their equity trading groups. AI-related IPOs, indebtedness raising, and different deals are throwing disconnected hefty underwriting and advising fees.

Morgan Stanley bagged a starring presumption taking rocket shaper SpaceX (SPCX) nationalist during the quarter. It and rival Goldman Sachs each earned a $100 cardinal chopped of the underwriting fee.

The IPO enactment helped the bank's wealthiness absorption level shatter expectations by bringing successful a grounds $148 cardinal successful nett caller assets, compared to $59.2 cardinal successful the twelvemonth agone quarter. Revenue successful that part roseate 14% to $8.8 billion.

David Hollerith covers a scope of developments passim the fiscal sector, from Wall Street to banking and plus absorption to crypto and fintech. Email him astatine [email protected]. Follow him connected X astatine @DsHollers.

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