(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 Wall Street’s undisputed winners, with a sweetheart deal to buy part of Smith Barney and eventually all of Smith Barney. With this acquisition, they became a powerful champion of Wall Street wealth management for thousands of broker-turned-advisors across the country. Additional acquisitions such as E-Trade and the EquityZen acquisition deal announced last week widened the funnel, bringing millions of potential customers into the high net worth sector. Former CEO James Gorman took the company to new heights and created a strong succession plan that led to the Ted Pick era. The momentum of picks seems to be unstoppable. And while the property business has been great for years, there’s now a different engine firing on all cylinders, and that’s investment banking. Morgan Stanley is always in the spotlight when a major merger is completed or an IPO goes public. They receive paycheck after paycheck and the growth in revenue is impressive. The I-Banking pipeline is now larger and the quality of deals is higher than during the 2021 IPO boom. It’s a great time to be a Wall Street investment bank, and Morgan Stanley is one of the best. Stock prices are starting to price in these trends continuing into 2026 – more trading, higher trading volumes, continued growth in asset management and high margins in asset management, a favorable interest rate environment and a relaxed regulatory regime, giving us the headroom we need to continue beating earnings expectations. Sean goes into detail about the basics and I’ll come back with a chart. Stock to watch: Morgan Stanley (MS) Listing date: August 13, 2025 Sean — Morgan Stanley has several structural and cyclical tailwinds that have supported its strong performance over the past few years. Since 2019, the company has been growing its net profit at a compound annual rate of approximately 9%, primarily through its wealth management franchise. Fee-based flows exceeded $40 billion for the second consecutive quarter, strengthening the sustainability of the company’s high-margin recurring revenue mix. Wealth management revenue for the quarter increased 13% year-over-year to $8.2 billion, and total client assets increased $1.3 trillion year-over-year to a record $8.9 trillion. As scale continues to absorb fixed costs, the division achieved pre-tax margins of 30.3% and continues to support the company’s profitability as it moves toward its goal of $10 trillion in assets under management. Cyclically speaking, investment banking is recovering. The segment’s revenue rose 44% to $2.1 billion in the latest quarter, with strong margin growth expected due to improved IPO, M&A and underwriting activity. On the expense side, management highlighted the increasing contribution of technology, particularly AI tools such as DevGen, Parable and LeadIQ, which are starting to improve productivity in both front- and back-office workflows. Management also expressed confidence in returning more capital to shareholders over the coming quarters, citing improved capital efficiency and a positive regulatory backdrop. The outlook for 2026 will depend on trading activity, equity market strength and the interest rate environment, with market-sensitive sectors contributing significantly to the short-term rally and wealth sectors providing stable cash flow-like returns. Risk Management Josh — I like this setup. Morgan Stanley has been a leader for the past six months and has been honored throughout its 50-day rally. Last week, the stock fell slightly, but the buyers made a kicksave (and a masterful one!) and invalidated this false breakdown within a day or two. I think longs can pull the trigger here as the stock is down 8-9 points from its all-time high. $150 is your stop. If the weekly closing price is below, you may be exiting the trade and watching to see if you can make a better entry in the future. Disclosure: (none) All opinions expressed by CNBC Pro contributors are solely their own and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliate companies, and may have been previously disseminated on television, radio, the Internet, or another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The Content is general in nature and does not reflect any individual’s unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Investments involve risk. The analysis examples included in this article are examples only. The views and opinions expressed are those of the contributors and do not necessarily reflect the official policy or position of Ritholtz Wealth Management, LLC. Josh Brown is the Chief Executive Officer of Riholtz Wealth Management and may maintain securities positions in the securities discussed. The assumptions made within the analysis do not reflect the position of “RITHOLTZ WEALTH MANAGEMENT, LLC” to date or our disclosures. Click here for the full disclaimer.
