Morgan Stanley’s Q3 Momentum: Beating Goldman Sachs in Equities & IB, GS Holds Value Edge

In Q3 2025, Morgan Stanley posted revenue of $18.2 billion, up ~18% year-over-year, and net income of $4.6 billion, equating to EPS of $2.80, representing roughly a 45% increase relative to Q3 2024. [2] Equities trading revenue rose 35% to about $4.1 billion, outpacing Goldman’s $3.74 billion in equities. [1][3] Investment banking revenue for MS surged 44% YoY to ~$2.1 billion, while Goldman’s investment banking revenues rose ~42–43%. [2][4] These results underscore MS’s strong performance and narrowing gap with GS in core capital markets activities.

Goldman’s Q3 showed solid revenue strength: net revenue of $15.18 billion (+20% YoY), EPS of $12.25 (+46%), ROE at 14.2%, and tangible book growth. [4][5] Its investment banking fees were roughly $2.66 billion, driven by M&A advisory fees (~$1.4 billion) and underwriting fees. Equities net revenue of $3.7 billion (+7% YoY) and FICC (fixed income, currencies, commodities) up 17% helped offset lagging performance in equity derivatives and prime brokerage compared to MS. [4][3] Its Asset & Wealth Management (AWM) division also grew ~17% YoY with record Assets Under Supervision (AUS) of ~$3.45 trillion. [4][7]

From a valuation and capital allocation perspective, Goldman trades at a lower price-to-tangible-book (P/TB) than Morgan Stanley, providing value appeal to investors. [1] Both cleared the 2025 Fed stress tests and have announced sizable dividends and share repurchase programs, with GS authorizations exceeding $40 billion and MS planning ~$20 billion in buybacks. [1] MS’s dividend yield (~2.4–2.6 %) is higher than GS’s (~1.7–1.9 %). [1][2]

Strategic implications: MS is now showing competitive edge in trading and underwriting, and its more balanced model—with wealth and asset management providing recurring revenues—may offer downside insulation during weaker capital markets. GS, meanwhile, is riding high in IB leadership and deal closure, but more vulnerable to cyclicality in equity markets and underwriting revenue. Open questions include whether MS can maintain the momentum, and whether GS can defend its deal pipeline dominance amid macro shocks.