Investment Banking and M&A Surge

Strong dealmaking defined late 2025 and offers a boom for 2026. Major Wall Street banks reported record year-end revenues: Goldman Sachs’ M&A fees jumped 25% in Q4, Morgan Stanley saw a 47% surge, and Citigroup topped the league in global advisory. Total investment banking fees on Wall Street surpassed $100 billion in 2025 (a long-awaited recovery). Executives across banks say corporate clients remain active: “We are seeing an accelerating pipeline in M&A and IPOs,” said Morgan Stanley CFO Sharon Yeshaya.

The momentum is expected to extend. Wells Fargo CEO Charlie Scharf noted their deal pipeline is bigger than at any time in the past five years, and Gabelli fund manager Macrae Sykes predicts “2026 [will be] a very strong year of IPO issuance and announced M&A”. Factors cited include healthy global GDP growth (IMF ~3.3%), deregulation under the new administration, and easing funding costs after Fed cuts in 2025. A roster of high-profile IPOs is already brewing: rumoured candidates include OpenAI, SpaceX and AI firms. Private equity exits (leveraged buyouts) are also set to climb after a quiet 2024-25.

Wealth managers see diverse opportunities: tech and healthcare remain hot areas, and energy deals have returned (e.g. Aramco recently posted a profit drop and launched its first share buyback, highlighting sector consolidation). Still, uncertainty looms – e.g. the recent $110B bidding war for Warner Bros Discovery drew intense scrutiny (see below). But for now, banks are staffing up deal teams, and analysts warn that any meaningful tightening of credit or a sharp market drop could slow activity. Overall, the first quarter suggests the “volcano” of pent-up corporate transactions is erupting – a major driver for global financial markets in 2026.

Pull quote: “We expect 2026 to be a very strong year of IPO issuance and announced M&A,” said Macrae Sykes, portfolio manager at Gabelli Funds.