This big bank that’s beating out JPMorgan Chase just made Josh Brown’s Best Stocks list
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Trading profits in equities, fixed income, commodities and currencies come and go on Wall Street. They’re a helpful contributor to the bulge brackets’ earnings per share, but they do nothing for the multiple. Because everyone knows that trading profits are ephemeral. They can fall or even reverse into losses at any time. As Frank Sinatra explains, “That’s life. That’s what all the people say. You’re riding high in April, shot down in May.” So when you think of Morgan Stanley , I want you to think of two things – investment banking and wealth. Those are the twin engines of the company’s renaissance over the last two decades since the financial crisis. They’re the two businesses that Morgan Stanley does as well as or better than any other player in the world. The benefits of an explosive (and long-duration) bull market for a top-tier investment bank are obvious. All this frenetic activity in underwriting, capital raising, IPOs, secondaries, mergers and acquisitions, private equity and debt deals, etc. — the opportunities have been endless and don’t require much explanation. On the Wealth side, Morgan Stanley’s shrewdness may not be as readily apparent to the outside observer. Under former CEO James Gorman, the company integrated its massive Smith Barney takeover and then set about acquiring businesses that would do the most important thing in the industry: make it rain. Having thousands of financial advisors cold-calling to find their next one or two clients is cute. Having millions of customers for other services flood into the Morgan Stanley machine and then be connected to financial advisors from inside the firm, well that’s just genius. Morgan Stanley’s internal referral machine is literally on fire. Over the past five years, Morgan Stanley’s wealth management business has pulled in more than $1.6 trillion in net new assets and doubled its fee-based flows. The business now serves over 20 million client relationships and closed 2025 with $7.4 trillion in wealth management client assets, generating $31.8 billion in full-year revenue at a 29.3% pre-tax margin. And here’s the punchline: Roughly $100 billion migrated to financial advisors last year from clients who originally came in through the Workplace or ETRADE channels, which is the whole thesis of the ETRADE acquisition playing out in real time. You buy the bottom of the funnel, let time and life events do the work, and eventually those self-directed accounts raise their hand for an advisor. I speak from experience as the co-founder of Ritholtz Wealth Management. We always thought that if we built a large enough audience, every day someone from within that audience would raise their hand and ask for help. A few thousand client households later and we know that was the right idea. Morgan Stanley has acquired their way into the same lane and their advisors, like ours, are reaping the benefit. The shareholders are too. Sean’s going to get further into this stuff below and then I will be back with the chart and some risk management for those considering taking the trade. Best Stock Spotlight: Morgan Stanley (MS) Sean — Morgan Stanley first appeared on our radar in November, when financials were beginning to show strength. MS held its place on the list until a confluence of AI-fear and renewed Middle East tensions knocked the stock off its uptrend. Now it’s back and lighting it up relative to its peers. Morgan Stanley has outperformed Citigroup, Wells Fargo, Bank of America, and even the great JPMorgan Chase, on an annualized total return basis over the past 15 years. Morgan Stanley has been on a heck of a run, and as Josh mentioned, its investment banking and wealth divisions have vaulted this bank into the upper echelons of banking in 2026. In Q1, Morgan Stanley’s wealth segment posted a record quarter with $8.5 billion in net revenues, up 16% year over year, driven by a combination of higher market levels and the compounding effect of fee-based inflows. Fee-based flows alone surged 80% to $53.7 billion in the quarter, with total wealth-client assets now standing at $7.4 trillion and over $1.2 trillion of that sourced from the Workplace and E-Trade channels since 2020. If MS can continue to raise assets in a world buoyed by stocks, this number will continue to compound, and the multiple applied will also continue to improve. Investment banking is firing on all cylinders as well. Institutional Securities revenues hit a record $10.7 billion, up 19%, with Investment Banking itself growing 36% to $2.1 billion. Advisory revenues were the standout, up 74% to $978 million, driven by a pickup in completed M & A — particularly in technology and industrials across the Americas. The combination of growth and durability between banking and wealth has led to a re-rating higher for MS. The bank trades at a 2.9x price to book, its highest since 2001, and higher than JPM’s. This is not a reason to be bearish; instead, this is a reflection of quality in the business, and business is booming. Risk management Josh — Morgan Stanley has been one of the steadiest charts in the market over the past year, building a series of higher highs and higher lows along a rising 50-day that never stopped climbing. Long-time readers of the Best Stocks column know that we like slow and steady better than parabolic — at least for entries. The stock pulled back sharply into March, undercut the 50-day, and then reclaimed it with enough conviction to signal that buyers were still in control. From that reclaim, MS has run nearly $30 and is now knocking on $200. That round number is the level to watch. A clean close above it puts the stock in open air. I’m not afraid to anticipate it. RSI is at 64 which is a healthy momentum reading that is firm without being stretched. The trend has been steady enough that this reading reflects a stock in a serious uptrend, not a momentary burst of excitement. Traders can use the 50-day, currently at $178, as their line in the sand. A break and close below it changes the character of the move. When the 50-day was last tested, there were several closes below it without a complete breakdown. If you’re too rigid with your stops, you can get whipsawed. You may want to eyeball the next test without having a physical sell order in. Investors can look lower, to the $169 area where the 200-day sits and where price found support on the March lows. Two touches at that level makes it meaningful. As long as MS holds above those two reference points, the path of least resistance remains higher. Morgan Stanley is obviously a bet on the health of the equity markets in the second half. Like Goldman Sachs, which we wrote about last week, you need the environment to remain intact for the stock to keep working. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
<
