2026 has been a solid year for U.S. investment banks.
Per a recently released Goldman Sachs report, “Global M&A volumes rose 48% YoY against an unusually supportive backdrop,” which was “driven primarily by the surge in deal size, with mega M&A volumes +125% YoY.”
And the firm expects that strength to continue, saying that the M&A cycle has “substantial room to run, despite long-standing geopolitical and inflationary pressures.”
Further, we’re witnessing a historical IPO market (which is great for the underwriters), as the recently completed second quarter saw nearly $116 billion in IPO proceeds (largely driven by the SpaceX IPO), which marks the second-highest quarterly total this century, behind only the first quarter of 2021 (at $133 billion).
Should dealmaking continue apace, and should we see the much-anticipated IPOs of Anthropic or OpenAI emerge, it looks like the environment should remain supportive for investment banks.
With that in mind, let’s take a look at two of Wall Street’s heaviest hitters when it comes to dealmaking: Goldman Sachs (GS) and Morgan Stanley (MS).
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Goldman Sachs (GS) vs. Morgan Stanley (MS): The Tale of the Tape
Stock price performance (1-year)
- GS: +43.5%
- MS: +49.5%
Valuation
- P/E (TTM): GS 16.05 vs. MS 17.47
- P/B: GS 2.76 vs. MS 3.19
Dividend yield
- GS: 1.94%
- MS: 2.14%
Institutional ownership (percent of float)
- GS: 76.25%
- MS: 83.24%
Total deal volume (1H 2026)
- GS: $1.31T
- MS: $880B
Round 1: Stock performance — Mixed, but edge to GS
MS has been the better performer over the last year, rising 49.5% compared to 43.5% for GS.
But over the last five years, Goldman Sachs has handily outperformed the competition, with a 151.2% gain compared to Morgan Stanley’s 106.9% increase.
That said, both stocks are trading just off their all-time highs, so if you were inclined to give the round to MS, I wouldn’t argue.
Round 2: Valuation — Advantage: GS
- Price/Earnings (P/E): GS is slightly cheaper on earnings.
- Price/Book (P/B): GS is meaningfully cheaper on book.
While dealmaking fees are independent of an investment bank’s book of assets, P/B is still a reality check for banks. On that lens, GS looks less stretched than MS.
Round 3: Dividend yield — Advantage: MS
MS offers a modestly higher dividend yield, but if your 2026 thesis includes “higher-for-longer rates plus decent equity returns,” that extra yield can be meaningful—especially if deal volumes don’t accelerate as quickly as hoped.
Round 4: Institutional ownership — Advantage: MS
MS is more popular among institutional investors, who hold meaningfully more of the “float” (publicly available shares) than they do in GS.
But that can cut both ways, as it suggests deep sponsorship and broad index/fund participation (often supportive in drawdowns) but can also mean more “crowding” (less incremental buyer power and more selling “ammunition” if sentiment flips).
Round 5: Total deal volume — Advantage: GS (the key round)
Goldman Sachs is the 800-pound gorilla when it comes to investment banking and is routinely at the top of the heap when it comes to total volume.
In the first half of 2026, Goldman advised on an astronomical $1.3 trillion in deals (per this scorecard from dealogic), which put them well ahead of Morgan Stanley’s $880 billion.
That follows a 2025 in which Goldman was also at the front of the pack ($1.6 trillion in deals vs. Morgan Stanley’s $1.1 trillion), and a similarly weighted 2024 ($968 billion for Goldman; $744 billion for Morgan Stanley).
These are both heavy hitters, but Goldman leaves the competition in the dust, and when advisory and underwriting activity rises, the bank that’s already winning the biggest mandates tends to capture a disproportionate share of the incremental fees.
And that’s especially important this year, which has seen an increase in the number of large deals and a decrease in the number of smaller mergers.
Business mix reality check: “Best investment bank” vs “best stock for a deal boom”
Both are elite, but the market exposure isn’t identical:
- Goldman (GS) is commonly viewed as more levered to institutional-facing businesses (investment banking + markets), which tend to benefit directly when M&A/IPO calendars fill up.
- Morgan Stanley (MS) has more of a wealth/asset-management ballast—which can dampen downside but can also dilute “pure-play” upside to a deal surge.
So even if both banks continue to participate in the 2026 surge, GS gives you more exposure to the thesis.
The Verdict: Goldman Sachs (GS) Comes Out on Top
Both companies should do well in a deal-heavy environment, and they’re both “Bull Market Stocks” (as Mike Cintolo would put it), but if you’re looking to play the M&A and IPO boom in 2026, Goldman Sachs gives you the most upside.
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*This post has been updated to reflect current market conditions.
