Wall Street bankers look to busy 2026 after profiting from major deals

Wall Street investment bankers are heading into 2026 expecting a busy year after benefiting from a surge in large deals and stock market listings in 2025, as a long-awaited recovery in global dealmaking gathered pace.

Major U.S. banks reported stronger fourth-quarter results this week, driven by rising investment banking revenues. Goldman Sachs said its investment banking fees jumped 25% compared with a year earlier, while Morgan Stanley reported a 47% increase in investment banking revenue. Citigroup posted record revenue from mergers and acquisitions advisory in 2025, underscoring the rebound in corporate deal activity.

According to Dealogic data, global investment banking revenues topped $100 billion in 2025, a significant milestone after several difficult years marked by high interest rates and volatile markets. Bank executives said deal pipelines remain active as companies regain confidence and financial conditions improve.

“We are seeing an accelerating pipeline in M&A and IPOs,” Morgan Stanley Chief Financial Officer Sharon Yeshaya said, adding that healthcare and industrial sectors are expected to be key drivers of future transactions. Other banks echoed that view, even as some firms posted results that fell short of analysts’ expectations due to tougher comparisons and deals being delayed into 2026.

JPMorgan Chase, which earned the highest investment banking fees industry-wide last year, reported weaker-than-expected revenues in its investment banking division as some transactions were pushed back, but said it expects strong client engagement and deal activity in 2026. Bank of America recorded only a modest increase in investment banking fees during the quarter, while Wells Fargo said it entered 2026 with its strongest deal pipeline in five years.

Bankers are also looking to a richer pipeline of initial public offerings next year. High-profile companies reported to be considering IPOs in 2026 include ChatGPT maker OpenAI, Elon Musk’s rocket company SpaceX and AI chipmaker Cerebras. A more permissive U.S. antitrust environment and stronger equity markets are expected to encourage companies to pursue larger mergers and public listings.

Large transactions returned in force in 2025, led by Electronic Arts’ proposed $55 billion take-private deal, which would be the largest leveraged buyout on record if completed, and Union Pacific’s $85 billion bid for Norfolk Southern, currently under regulatory review. An unexpected surge in dealmaking late in the year saw bankers working through the holiday season, signaling renewed momentum across the industry.

The strong performance defied expectations that deal activity would falter after U.S. President Donald Trump announced sweeping tariffs in the spring, which had initially unsettled global markets. Instead, investment banks ended 2025 on a high note, with executives saying the outlook for 2026 remains positive, even as they caution that market conditions can change quickly.