Goldman or Morgan Stanley: Which Stock Is Better Bet Post Q3 Results?

2026.10.26 14:12 (GMT+0)

Goldman or Morgan Stanley: Which Stock Is Better Bet Post Q3 Results?

Wall Street heavyweights The Goldman Sachs Group, Inc. GS and Morgan Stanley MS continue to capitalize on improving investment banking (IB) activity, robust equities trading and growing demand for financial services. Both companies delivered impressive third-quarter 2026 results, reflecting their strong market positions and ability to navigate a dynamic operating environment.

The continued recovery in mergers and acquisitions (M&As), healthy underwriting activity, and strong institutional client engagement have supported their financial performances. While Goldman has demonstrated stronger IB revenue growth and trading momentum, Morgan Stanley continues to benefit from its diversified business model and expanding wealth management franchise. Against this backdrop, which IB powerhouse offers better investment prospects following the latest quarterly results? Let us examine.

The Case for GS

Goldman remains a dominant player in M&A advisory, underwriting and trading. The company's IB business has benefited significantly from improving global dealmaking activity and capital markets issuance. During the first nine months of 2026, IB fees jumped 40% year over year to $9.46 billion, supported by increases of 34%, 73% and 29% in advisory, equity underwriting and debt underwriting revenues, respectively.

Management continues to view the capital markets environment favorably, with opportunities arising from strategic dealmaking, technology investments and AI infrastructure financing. Although higher interest rates and macroeconomic uncertainties could affect deal activity, GS's leading market position and healthy pipeline position it well to capitalize on the ongoing investment banking recovery.

Goldman continues to streamline its operations by exiting non-core consumer banking businesses and strengthening its core franchises. The company is accelerating expansion in asset and wealth management to diversify its revenue sources and generate more durable fee-based income. In sync with these efforts, in August 2026, Goldman announced an agreement to acquire NEOS Investments, a provider of derivative income exchange-traded funds (ETFs). In April 2026, Goldman completed the acquisition of Innovator Capital Management, expanding its active exchange-traded fund (ETF) capabilities. Earlier, it completed the acquisition of Industry Ventures to strengthen its presence in venture capital and alternative investments. These initiatives complement its efforts to expand private market offerings and deepen client relationships.

The benefits of Goldman's strategic repositioning are increasingly evident in its financial performance. For the first nine months of 2026, GBM revenues jumped 34% to $41.72 billion, while AWM revenues rose 15% to $13.73 billion. Continued asset gathering and strategic acquisitions should support recurring fee income and reduce the dependence on market-sensitive businesses over time.

The Case for MS

Morgan Stanley continues to leverage its integrated business model, encompassing institutional securities, wealth management and investment management. The company has strategically diversified its revenue streams to reduce the dependence on volatile capital markets activities while benefiting from improving IB conditions.

The company's IB performance remained strong during the first nine months of 2026, with consolidated IB revenues increasing 30% year over year to $7.30 billion. The company is well-positioned to benefit from a healthier deal environment, supported by a robust and diversified pipeline across regions and sectors. Momentum is expanding beyond the Americas into Asia and EMEA, while active M&A and IPO markets, together with the company’s strong competitive position, are expected to support further growth as the macroeconomic backdrop evolves.

Morgan Stanley's strategic focus on expanding wealth and investment management operations remains a major strength. Acquisitions such as E*TRADE and Eaton Vance have enhanced its scale and diversified its business mix. Further, the acquisition of EquityZen, completed in January 2026, strengthened its private markets capabilities and offerings for corporate and wealth management clients.

The benefits of this transformation were evident in the first nine months of 2026. Wealth Management revenues increased 13.4% year over year to $26.44 billion. Moreover, the business attracted $498.9 billion in net new assets and $173.3 billion in fee-based asset flows during the first nine months of 2026. Wealth Management client assets reached $8.43 trillion as of September-end, up 19.5% year over year, while combined client assets across Wealth and Investment Management stood at $10.5 trillion, highlighting the growing scale of Morgan Stanley's wealth management franchise. This expanding client asset base provides Morgan Stanley with significant opportunities to generate recurring fee revenues and deepen client engagement.

GS & MS: Price Performance, Valuation & Other Comparisons

Over the past year, Goldman shares have gained 10.9%, outperforming Morgan Stanley’s 8.1% rise. In comparison, the industry has returned 3.3%.

Price Performance