Morgan Stanley (NYSE:MS) reported record second-quarter 2026 results, with executives citing strong client activity across institutional securities, wealth management and investment management, as well as continued benefits from the firm’s integrated business model.
Chairman and Chief Executive Officer Ted Pick said the firm generated more than $21 billion in quarterly revenue and earnings per share of $3.46, contributing to what he called an “exceptional first half” of 2026. Chief Financial Officer Sharon Yeshaya said second-quarter revenue was $21.3 billion, return on tangible common equity was 26.6%, and the firm’s year-to-date efficiency ratio was 65%.
Across wealth and investment management, total client assets reached $10 trillion, a strategic milestone Pick said the firm had fulfilled. He said Morgan Stanley is seeking over time to grow standalone wealth assets from the current $8 trillion to $10 trillion.
Institutional Securities Posts Record Revenue
Morgan Stanley’s institutional securities segment delivered record revenue of $11 billion and record pre-tax profit of $4.3 billion, according to Yeshaya. She said results were driven by the firm’s equities franchise and supported by investment banking.
Investment banking revenue rose 58% from the prior year to $2.4 billion, reflecting stronger activity across advisory, equity underwriting and fixed income underwriting. Advisory revenue increased to $798 million on higher completed activity, with contributions across industrials, technology and healthcare. Equity underwriting revenue was $851 million, supported by what Yeshaya described as a robust IPO market and strong follow-on and convertible activity. Fixed income underwriting revenue reached a record $788 million, driven by bond issuance from both investment-grade and non-investment-grade companies.
Yeshaya said the investment banking outlook remains “constructive,” with healthy pipelines and broad-based client dialogue. While year-to-date activity has been led by the Americas, she said global activity is building.
Equities revenue reached a record $6.3 billion, with increases across products and regions. Yeshaya said Asia was strong, with activity broadening across the region. Prime brokerage revenue rose from the prior year on higher average client balances and strong activity in Asia, while cash equities benefited from active client engagement and higher market volumes in the Americas. Derivatives results were also described as very strong.
Fixed income revenue was $2.5 billion. Yeshaya said macro results were roughly flat from the prior year, as resilience in rates offset weaker foreign exchange activity in an environment where volatility traded near historic lows. Micro results increased year over year, driven by credit corporates, primary issuance and growth in securitized product lending balances.
Wealth Management Benefits From IPO-Related Flows
Wealth management generated record revenue of $8.9 billion and pre-tax profit of $2.7 billion, with a pre-tax margin of 30.5%. Total client assets in the business stood at $8 trillion.
The business recorded $148 billion in net new assets, which Yeshaya said was a record. Fee-based flows were $39 billion, and fee-based assets totaled $3 trillion. Stock plan IPO flows represented just over half of overall net new assets during the quarter, more than offsetting seasonal tax-related outflows.
Yeshaya said the results demonstrated the strength of Morgan Stanley’s workplace channel and the firm’s client acquisition funnel. She said the firm has relationships with about 70% of the top 100 unicorns by market capitalization in its workplace pipeline and now has 20 million “touch points” through workplace and related client relationships.
In response to analyst questions, Yeshaya said workplace-related flows will vary by IPO timing, vesting schedules and other factors. She emphasized that the firm is focused on retaining clients who enter through the workplace channel and moving them toward advice-based relationships where appropriate.
Pick said the wealth management margin has exceeded 30% several times, but added that management is not “solving for” a particular margin number. Instead, he said the firm is focused on driving pre-tax profit growth while continuing to invest in areas that support long-term wallet share gains.
Wealth management net interest income increased to $2.3 billion, supported by higher-than-expected sweep balances and strong loan growth. Yeshaya said the firm expects a modest sequential increase in net interest income in the third quarter.
Investment Management Reaches $2 Trillion in AUM
Investment management assets under management reached a record $2 trillion. The segment reported $1.6 billion in revenue, up 6% from the prior year, driven by higher asset management and related fees tied to higher average AUM.
Long-term net inflows were $7.5 billion in the quarter, led by alternatives and solutions, including Parametric, as well as fixed income strategies. Yeshaya said Parametric remains a key differentiator for Morgan Stanley, with more than $760 billion in AUM.
Capital Position Supports Buybacks and Dividend Increase
Morgan Stanley ended the quarter with a standardized common equity tier 1 ratio of 14.8%. Yeshaya said total spot assets grew to $1.7 trillion, while standardized risk-weighted assets increased to $590 billion as the firm supported higher client activity.
The firm repurchased $1.5 billion of common stock during the quarter and announced a 15-cent increase in its quarterly dividend, bringing the payout to $1.15 per share. Pick said Morgan Stanley has accreted $18 billion of CET1 capital over the last 10 quarters and has a capital cushion of at least 300 basis points.
During the question-and-answer session, Pick said there is strong demand for the firm’s capital across investment banking, fixed income, equities and wealth management clients. He also said management continues to evaluate potential bolt-on acquisitions, but emphasized that the firm’s bias remains toward organic investment.
Executives Highlight AI, Geopolitics and Deal Activity
Pick reiterated two themes he said have come into sharper focus in 2026: the accelerating adoption of artificial intelligence and the return of geopolitics as a major force in the global economy. He said AI-related capital spending expectations continue to rise, citing internal research that projects data center capital expenditures of about $850 billion in 2026, $1.3 trillion in 2027 and potentially $1.5 trillion in 2028.
Pick said the firm’s role in that environment is to advise, finance and allocate capital for clients, though he cautioned that the AI investment cycle remains early and subject to uncertainty from technology, supply chain, geography and nation-state involvement.
On merger and acquisition activity, Pick said the backdrop is favorable, citing what he characterized as a normalization of regulation, strong economic conditions and pent-up activity after prior periods of disruption. Yeshaya said the investment banking cycle began with debt issuance, has broadened into equity activity, and could see additional momentum from financial sponsors.
Pick said Morgan Stanley enters the second half of 2026 “from a position of strength,” with clients seeking advice on complicated global markets and interest in new products and innovation.
About Morgan Stanley (NYSE:MS)
Morgan Stanley (NYSE: MS) is a global financial services firm headquartered in New York City. Founded in 1935 by Henry S. Morgan and Harold Stanley, the company provides a broad range of investment banking, securities, wealth management and investment management services to corporations, governments, institutions and individual investors. Leadership has been guided by a senior executive team and board of directors; James P. Gorman has served as the company’s chief executive and chairman in recent years.
The firm’s primary business activities are organized around three principal businesses: Institutional Securities, Wealth Management and Investment Management.
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