It’s a great time to be a Wall Street bank, and this one on our Best Stocks list is gaining momentum
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Morgan Stanley emerged from the financial crisis 15 years ago as one of the undisputed winners on Wall Street, with a sweetheart deal to acquire some and then eventually all of Smith Barney. Through this acquisition, they became the heavyweight champion of Wall Street wealth management with thousands of brokers-turned-advisors across the country. Add-on acquisitions like E-Trade and the deal to buy EquityZen announced last week have widened the funnel and brought millions of potential customers into the wealth unit. Former CEO James Gorman took the company to new heights and then created a strong succession plan which has now led to the Ted Pick era. Pick seems to be continuing the momentum. And while the wealth business has been great for years, there is now another engine firing on all cylinders: the investment bank. Anywhere a large merger is being consummated or an IPO is coming public, Morgan Stanley is on the books. They’re getting paid coming and going and the revenue growth is eye-opening. The I-banking pipeline is bigger today than it was during the IPO boom of 2021 and the deals are higher quality. It’s a great time to be a Wall Street investment bank, and Morgan Stanley is among the very best. The stock is starting to price in a continuation of these trends into 2026 — more deals, higher trading volumes, continued high margin growth in wealth and asset management, a favorable interest rate environment and a deregulation regime giving them the elbow room they need to keep smashing their earnings expectations. Sean’s going to dive into the fundamentals and I will be back with a chart. Best Stock spotlight: Morgan Stanley (MS) On the list since: Aug. 13, 2025 Sean — Morgan Stanley has several structural and cyclical tailwinds at its back, supporting its strong performance over the past few years. Since 2019, the firm has compounded net income at roughly 9% annually, powered in large part by its wealth-management franchise. Fee-based flows topped $40 billion for the second consecutive quarter, reinforcing the durability of its higher-margin, recurring-revenue mix. Wealth management revenue this past quarter grew 13% year-over-year to $8.2 billion, while total client assets reached a record $8.9 trillion — up $1.3 trillion from a year ago. With scale continuing to absorb fixed costs, the segment delivered a 30.3% pre-tax margin and remains the firm’s profitability anchor as it advances toward its $10 trillion AUM target. Cyclically, investment banking is rebounding. Revenue from the segment rose 44% to $2.1 billion in the latest quarter, with improving IPO, M & A and underwriting activity driving high incremental margins. On the expense side, management highlighted the growing contribution of technology—particularly AI tools like DevGen, Parable and LeadIQ—which are beginning to improve productivity across both front- and back-office workflows. Management also signaled confidence in returning more capital to shareholders over the coming quarters, citing stronger capital efficiency and a constructive regulatory backdrop. With market-sensitive segments contributing more of the near-term upside and the wealth unit providing steady, cash-flow-like earnings, the setup for 2026 hinges on deal activity, equity-market strength and the rate environment. Risk management Josh — I like this setup. Morgan Stanley has been a leader for the last six months and has paid obeisance to its rising 50-day the entire way up. This past week, it stumbled slightly below, but the buyers pulled a kick-save (and a beaut!), invalidating this false breakdown within a day or two. With the stock 8 or 9 points off its high, I think longs can pull the trigger right here. $150 is your stop. A closing weekly price below takes you out of the trade and perhaps watching for a better entry down the road. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. 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