Wall Street’s investment banks riding wave of IPOs, mergers and new debt
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- The six largest U.S. banks saw investment banking fees surge 45% on average in Q2 from a year earlier, with Morgan Stanley posting the strongest percentage growth.
- Goldman Sachs CEO David Solomon said the bank's deal backlog hit its highest level in five years and second-highest on record, anchored by what he called a record advisory backlog.
- U.S. IPOs raised a record $104.8 billion in Q2 per Renaissance Capital, driven by SpaceX's "historic listing," reopening an exit channel for PE and VC sponsors that had been forced to hold portfolio companies longer than expected.
- Wall Street is preparing for confidential IPO filings from Anthropic and OpenAI, each potentially valued around $1 trillion with listings that could come as soon as this year.
- Global M&A volumes crossed $3 trillion so far in 2026, up more than 40% year-over-year per Dealogic, with AI firms and AI-infrastructure "picks-and-shovels" businesses dominating activity alongside accelerated health care, utilities, and energy deals.
- Morningstar analysts said the "investment banking super-cycle" has room to run and they do not expect a "material contraction" until 2028 or later.
Why it matters: The fee surge plus Goldman's record advisory backlog means advisory talent — not capital — is the new bottleneck, and Citigroup CEO Jane Fraser explicitly flagged hiring to capture market share. A potential Anthropic-plus-OpenAI listing wave at ~$1 trillion each could dwarf prior tech IPOs and generate hundreds of millions in fees per mandate, though Morningstar still calls the business inherently volatile even with no contraction until 2028+.
