Wall Street bankers shift focus to busy 2026 after cashing in on big deals

Wall Street’s investment bankers expect to stay busy ‌this ​year after reaping a windfall from big-ticket deals and stock ‌market listings in 2025.

Top U.S. banks reported stronger fourth-quarter profits this week, with Goldman Sachs’ investment banking fees jumping 25% on a dealmaking ​boost and rival Morgan Stanley reporting a 47% surge in investment banking revenue. Citigroup clinched record revenue from M&A advisory last year.

“We are seeing an accelerating pipeline in M&A and IPOs,” Morgan Stanley’s chief financial officer, ‍Sharon Yeshaya, said in an interview with Reuters, adding that ​the bank expects more deals in healthcare and industrial sectors.

Executives at other major banks also said deal pipelines remained active, though quarterly results at some firms were more modest than analysts had projected.

Bank of America’s ​investment banking fees rose ⁠a marginal 1% in the quarter. JPMorgan Chase disappointed investors with lackluster revenues in the division due to tougher comparisons and some deals getting pushed to 2026, even though it still earned the highest fees industry-wide last year, according to Dealogic data.

Global investment banking revenues crossed $100 billion in 2025, Dealogic’s data showed. The milestone is significant as bankers saw a long-anticipated recovery materialize last year, following several challenging years marked by high interest rates and market volatility.

“In terms of the outlook, we expect strong client engagement and deal activity in 2026... which is reflected in ‌our pipeline,” JPMorgan CFO Jeremy Barnum told analysts on a post-earnings call on Tuesday.

The roster of high-profile companies reportedly exploring IPOs in 2026 has grown ​in ‌recent months and now includes ChatGPT maker OpenAI, ‍Elon Musk’s rocket startup SpaceX and AI ⁠chipmaker Cerebras.

“I expect 2026 to be a very strong year of IPO issuance and announced M&A,” said Macrae Sykes, portfolio manager at Gabelli Funds. “The environment has a number of tailwinds including healthy GDP growth, de-regulation and the coming effects of the lower cost of capital from the Fed rate cuts in 2025.”

A strong year for big-ticket deals and IPOs defied expectations in 2025 that activity would be derailed after U.S. President Donald Trump announced sweeping tariffs on major global economies in the spring, unsettling markets and investors worldwide.

“We entered 2026 with our deal pipeline meaningfully greater than it has been at any point in the last five years, although market conditions can always change,” Wells Fargo CEO Charlie Scharf said on a call with analysts on Wednesday.

Sponsor-led activity is also expected to pick up in 2026 as private equity and venture capital firms ​seek exits after years on the sidelines, waiting for valuations to recover and investor demand to return.

Large transactions returned in 2025, led by videogame developer Electronic Arts’ proposed $55 billion take-private deal, which would rank as the largest leveraged buyout in history if completed.

An unexpected burst of dealmaking late in the year saw bankers and advisers from Wall Street to Canary Wharf working through the holidays, laptops packed next to gifts.