What drove MS's earnings surprise in 2024?

Morgan Stanley's (MS) earnings surprise in 2024 can be attributed to several key factors: 1. **Wealth Management Performance**: Morgan Stanley's Wealth Management segment delivered record net revenues of $7.3 billion, with a pre-tax margin of 28.3%. The segment added $64 billion in net new assets, bringing total client assets to $6 trillion. This strong performance underscores the segment's ability to generate substantial revenues and contribute to the company's overall earnings. 2. **Investment Banking Strength**: The Institutional Securities segment reported notable strength in Investment Banking, with net revenues increasing to $6.8 billion. This reflects increased client activity in Equity and Fixed Income, as well as a significant rise in Investment Banking revenues. The rebound in deal flow in the IPO market also contributed to the segment's strong performance. 3. **Strategic Initiatives**: Morgan Stanley's strategic initiatives, such as the investment in AI and technology partnerships, have enhanced operational efficiency and client services. For example, the launch of AI-driven tools to support financial advisors has improved their productivity. Such initiatives have likely contributed to cost management and improved profitability. 4. **Global Business Momentum**: The company's global investment banking presence and expanding client base have driven business momentum. This has been evident in the significant increase in investment banking revenues and the growth of wealth management assets under management. In summary, Morgan Stanley's earnings surprise in 2024 can be attributed to strong performance across its Wealth Management and Institutional Securities segments, strategic initiatives, and global business momentum. These factors collectively contributed to the company's robust financial results and exceeded market expectations.