Goldman Sachs Group Inc. and Morgan Stanley capped big bank earnings season with record-breaking results that exceeded analyst expectations across key business lines. Goldman Sachs posted an all-time Wall Street record of $4.31 billion in equities-trading revenue for Q4, while the firm's full-year earnings per share reached $51.32—a 27% increase from 2024. The bank maintained a robust 16% return on equity for the quarter and 15% for the full year.
Morgan Stanley's debt banking division delivered the quarter's standout performance, with underwriting revenue surging 93% year-over-year to $785 million—the largest jump among major investment banks and marking the highest quarterly result in the firm's history. This explosive growth was propelled by tens of billions of dollars in artificial intelligence infrastructure financing, including more than $27 billion in debt financing arranged for Meta Platforms' Hyperion data center project alone. Total investment banking revenue climbed 47% to $2.41 billion, while the wealth management division attracted $122.3 billion in net new assets during the quarter, pushing total client assets to $9.3 trillion.
The strong results prompted Wall Street banks to accelerate capital returns to shareholders through buyback programs, supported by surging profits and an easing regulatory capital environment. Goldman Sachs returned approximately $4.2 billion to common shareholders in Q4, including $3 billion in stock repurchases and $1.2 billion in dividends. For the full year 2025, the firm repurchased $12.4 billion of shares and paid $4.4 billion in dividends. The board raised the quarterly dividend by 12.5% to $4.50 per share, while maintaining $32 billion of remaining buyback capacity under current authorization. Morgan Stanley repurchased $1.5 billion in common stock during the fourth quarter, bringing full-year repurchases to $4.6 billion.
Following the earnings releases, both institutions moved swiftly to tap credit markets with massive bond offerings. Goldman Sachs launched a bond sale of at least $12 billion—which grew to as much as $16 billion across six tranches spanning three to 21 years—the largest ever by a Wall Street bank. Morgan Stanley announced an $8 billion offering in as many as four tranches, while Wells Fargo tapped markets for additional capacity. The combined supply exceeded $24 billion, flooding high-grade credit markets with paper as banks refinanced maturing debt and locked in favorable funding costs.
Goldman Sachs CEO David Solomon revealed the firm is actively exploring opportunities in prediction markets, signaling Wall Street's growing interest in this emerging financial niche. Solomon disclosed that he personally met with leaders from two major prediction market platforms in recent weeks, dedicating several hours to understanding their business models. "The prediction markets are super interesting," Solomon remarked during the earnings call. "When you think about some of these, particularly if you look at some of the ones that are CFTC regulated, they look like a derivative contract. So I can see opportunities where these cross our business."