Morgan Stanley · Q2 2026 call

Across Wealth and Investment Management, total client assets stand at $10 trillion, fulfilling a Morgan Stanley strategic milestone. […] with the passage of time, we seek to grow standalone wealth assets from the current $8 trillion- $10 trillion.

The first is the accelerating adoption of artificial intelligence, not only by consumers but more importantly across the enterprise, where its potential for enhanced efficiencies and productivity is only beginning to be realized. […] The second is the return of geopolitics as a defining force in the global economy, as renewed competition among nation-states and regional powers is reshaping supply chains, capital allocation, and economic prospects across our client universe.

Our franchise delivered an exceptional quarter, with revenues reaching a record of $6.3 billion, driven by increases across all products and regions. Asia was strong, with the breadth of activity extending across the region.

Other revenues reflected a loss of $152 million, largely driven by mark-to-market losses on corporate loans held for sale, inclusive of hedges.

The pre-tax margin was 30.5%, a reflection of the scale of our business and the intentional strategic investments for our future.

Sequentially, deposits grew to $436 billion, and net interest income increased to $2.3 billion. NII outperformed on higher than expected sweep balances and strong loan growth. For the third quarter, we expect a modest sequential increase in NII.

Net new assets were a record of $148 billion. Stock plan IPO flows represented just over half of the overall NNA this quarter, more than offsetting seasonal taxes, illustrating the strength of the workplace channel as a strong contributor to the top of the funnel.

Parametric remains a key differentiator, with over $760 billion in AUM today.

Our quarterly tax rate was 23.1%. […] We continue to expect our annual tax rate to be between 22% and 23%, which similar to prior years, will exhibit some quarterly volatility.

we have about 70% of the top 100 unicorns by market cap in terms of our workplace pipeline

The reality is that 30 is a benchmark now we've hit a number of times, but it's not a number we're solving for.

We're currently at 20 million relationships. Do you remember when those numbers, Glenn, it's not that long ago, we were talking about 10, we were talking about 12, we were talking about 14, and those were big numbers.

We have, depending on how you measure it, 300- 350 basis points of excess CET1 capital, depending on which test, which period, and all that. We have a real SLR capacity too. The question becomes, is there demand for that capital? I can tell you that there is a lot of demand for that capital inside the four walls of our global firm.

Are we seeing opportunities come across the transom that are interesting? We are. Are we potentially looking at stuff that could bolt onto the strategy? We are. I would tell you right now, the bias continues to be to go organic.

The forecast for 2026 on data center CapEx that was taken late last year, around November of 2025, was that $575 billion would be spent this year, and it's coming in at about $850 billion. That for 2027, the view was it would be around $700 billion, and now it's projected at $1.3 trillion. 2028 could be at $1.5 trillion. […] You're basically looking at us being around 10%-15% of the way through the investment cycle.

Roughly $1 trillion of cloud compute times 10 is $10 trillion of AI compute. […] It's totally reasonable to say that there are going to be periods when technology or capital investment is ahead of adoption, or that the fight for primacy in a piece of this chain will deliver poor allocated investment outcomes.

I wouldn't attach a percentage to it, but I would say it's going to be meaningful.

we're not yet at the levels that we've seen historically in different areas in terms of what's actually been announced or been completed. There's clearly more to go there.

For a lot of our investors and for a bunch in your community, the view is that we're a U.S. play, right? […] We're also an Asia house. Very much an Asia house.

Higher highs to demonstrate operating leverage, but higher lows. Higher lows, really important to us so that we can continue to make the case to you and to our shareholders that we deserve a healthy PE multiple. That's got to be a function of durability.