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MS vs SCHW
Which Stock Would AI Choose? Morgan Stanley (MS) vs. Charles Schwab (SCHW) Stock Comparison
Key Takeaways
- Morgan Stanley (MS) delivered record second-quarter 2026 results, with net revenues of $21.35 billion and earnings per share of $3.46, driven by surging equities trading and investment banking activity.
- Charles Schwab (SCHW) has underperformed the broader market year-to-date, gaining roughly 2.4% versus the S&P 500's approximately 8.9%, reflecting the interest-rate sensitivity of its brokerage and banking model.
- Morgan Stanley's price-to-earnings ratio of roughly 17.4 sits below Schwab's multiple of approximately 20.2, despite Morgan Stanley posting significantly stronger earnings momentum and a return on tangible common equity (ROTCE) of 26.6%.
- Both firms operate in wealth management and capital markets, but their business mixes differ substantially: Morgan Stanley leans toward institutional trading and advisory, while Schwab is anchored in retail brokerage and net interest income (NII).
- Schwab's lower beta of 0.76 suggests less systematic volatility than Morgan Stanley's beta of 1.22, which may appeal to risk-conscious investors but has also coincided with more muted returns in the current cycle.
- Morgan Stanley's recent private credit fund redemption cap has introduced near-term uncertainty, while Schwab faces its own earnings catalyst with its Q2 report scheduled for July 21, 2026.
Introduction
Comparing MS and SCHW offers a window into two distinct corners of the U.S. financial services industry. Morgan Stanley, a premier investment bank and wealth manager, competes at the institutional and ultra-high-net-worth end of the market. Charles Schwab, one of the largest publicly traded brokerage and custody platforms, serves tens of millions of retail investors and registered investment advisors. This comparison is particularly timely as both firms navigate a landscape shaped by elevated interest rates, artificial intelligence-driven capital markets activity, and evolving investor preferences. Investors evaluating exposure to the financial sector may find this head-to-head analysis useful for understanding how these two industry leaders differ in growth drivers, risk profiles, and recent market behavior.
MS Overview and Recent Performance
Morgan Stanley is a global financial services firm organized around three primary segments: Institutional Securities, Wealth Management, and Investment Management. The company has increasingly emphasized its "Integrated Firm" strategy, which seeks to connect investment banking, trading, and advisory capabilities with its expansive wealth management platform. In recent weeks, Morgan Stanley reported blockbuster second-quarter results, posting record net revenues of $21.35 billion and earnings per share of $3.46 — far exceeding consensus estimates. The standout was the institutional securities division, where equities trading revenue soared 69% year-over-year to $6.3 billion, while investment banking fees climbed 58% to $2.44 billion, fueled by robust mergers and acquisitions (M&A) activity and high-profile initial public offerings. Wealth Management also reached a milestone, with total client assets across the firm surpassing $10 trillion and net new assets hitting a record $148 billion during the quarter.
Despite the stellar earnings, Morgan Stanley's stock experienced a sharp pullback in mid-July after reaching an all-time high of $232.25. A disclosure that its North Haven Private Income Fund had capped investor redemptions at just 5% of outstanding units — honoring only about 46% of requested withdrawals — raised concerns about liquidity in the firm's private credit operations. The stock shed roughly 7% from its peak within two sessions, underscoring how quickly sentiment can shift when credit-related risks surface. Still, the company's fundamentals remain robust: a standardized Common Equity Tier 1 (CET1) capital ratio of 14.8%, a newly authorized $20 billion share repurchase program, and a 15% dividend increase all signal management's confidence in the durability of its earnings power.
SCHW Overview and Recent Performance
The Charles Schwab Corporation operates one of the largest retail brokerage and custody platforms in the United States, alongside a sizable banking arm that generates significant net interest income from client deposits. The company's ecosystem spans self-directed trading, advised wealth solutions, workplace retirement plans, and custody services for independent registered investment advisors. Schwab's business model is inherently more tethered to the interest rate environment than Morgan Stanley's, given that NII has historically represented a substantial share of total revenue. Over recent months, Schwab shares have moved in a relatively tight band, with the stock trading between roughly $92 and $107 during the past quarter. On a year-to-date basis, SCHW has gained approximately 2.4%, lagging both the broader S&P 500 and Morgan Stanley's roughly 22.7% advance.
Schwab's more subdued performance reflects persistent investor caution around deposit costs, balance sheet positioning, and the pace of net interest margin recovery. While the Federal Reserve's higher-for-longer rate stance has created a favorable backdrop in certain respects, it has also prolonged competitive pressure on deposit pricing. Schwab's beta of 0.76 indicates lower sensitivity to broad market swings, which has historically offered downside protection but has also contributed to the stock's underperformance during a period when financial sector momentum has been strong. The company's upcoming Q2 earnings report — expected on July 21 — represents a pivotal near-term catalyst, with analysts focusing on client cash sorting trends, trading activity levels, and expense discipline.
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Head-to-Head Comparison
The most fundamental divide between Morgan Stanley and Charles Schwab lies in their revenue composition and client base. Morgan Stanley generates a significant portion of its income from institutional activities — trading, underwriting, and M&A advisory — which are inherently episodic but can deliver outsized results during favorable capital markets conditions. Schwab, by contrast, is built on recurring retail relationships where revenue is heavily influenced by the level and direction of interest rates, trading volumes, and asset gathering. This structural difference explains much of the recent performance gap: Morgan Stanley's record quarter was turbocharged by a dealmaking and trading boom that Schwab's model captures only modestly.
On valuation, Morgan Stanley trades at roughly 17.4 times trailing earnings versus Schwab's multiple of about 20.2, despite Morgan Stanley's superior earnings growth trajectory and higher ROTCE of 26.6%. That divergence may partially reflect the market's view that Schwab's earnings are more stable and recurring — but it also highlights how much growth optimism is already priced into Schwab shares. Risk profiles differ as well. Morgan Stanley's private credit exposure and higher beta introduce greater sensitivity to credit cycles and equity market drawdowns, while Schwab's primary vulnerabilities center on deposit behavior and net interest margin compression in a changing rate environment. From a capital return standpoint, both firms are shareholder-friendly: Morgan Stanley recently raised its dividend by 15% and authorized a $20 billion buyback, while Schwab has maintained a consistent payout alongside periodic repurchases.
Tickeron AI Verdict
Based on observable market data and trend characteristics, Tickeron's AI-driven analytical framework would likely favor MS over SCHW in the current environment. Morgan Stanley's combination of stronger earnings momentum, superior year-to-date and one-year relative performance, record revenue generation across multiple business lines, and a lower trailing valuation multiple collectively suggest that trend-following and momentum-oriented models would find the stock more attractive. The recent pullback from all-time highs, driven by private credit concerns rather than fundamental earnings deterioration, may also create conditions that algorithmic systems interpret as a potential re-entry opportunity within an otherwise intact uptrend. Schwab's more muted price action and its underperformance relative to both the S&P 500 and peer financials would likely place it lower in comparative rankings generated by trend and momentum algorithms. That said, Schwab's lower volatility profile and more predictable revenue model could make it a candidate for mean-reversion or defensive rotation strategies should broader market conditions shift. The AI verdict is probabilistic in nature and reflects current trend conditions rather than a permanent assessment of either company's intrinsic value.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is MS is a Hold and SCHW is a Hold.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
MS’s FA Score shows that 2 FA rating(s) are green whileSCHW’s FA Score has 1 green FA rating(s).
- MS’s FA Score: 2 green, 3 red.
- SCHW’s FA Score: 1 green, 4 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
MS’s TA Score shows that 3 TA indicator(s) are bullish while SCHW’s TA Score has 5 bullish TA indicator(s).
- MS’s TA Score: 3 bullish, 5 bearish.
- SCHW’s TA Score: 5 bullish, 4 bearish.
Price Growth
MS (@Investment Banks/Brokers) experienced а -3.05% price change this week, while SCHW (@Investment Banks/Brokers) price change was -1.51% for the same time period.
The average weekly price growth across all stocks in the @Investment Banks/Brokers industry was -4.50%. For the same industry, the average monthly price growth was -10.09%, and the average quarterly price growth was -21.23%.
Reported Earning Dates
MS is expected to report earnings on Oct 14, 2026.
SCHW is expected to report earnings on Jul 21, 2026.
Industries' Descriptions
@Investment Banks/Brokers (-4.50% weekly)These banks specialize in underwriting (helping companies with debt financing or equity issuances), IPOs, facilitating mergers and other corporate reorganizations and acting as a broker or financial advisor for institutions. They might also trade securities on their own accounts. Investment banks potentially thrive on expanding its network of clients, since that could help them increase profits. Goldman Sachs, Morgan Stanley and CME Group Inc are some of the largest investment banking companies.
| MS | SCHW | MS / SCHW | |
| Capitalization | 339B | 177B | 192% |
| EBITDA | N/A | N/A | - |
| Gain YTD | 22.713 | 2.361 | 962% |
| P/E Ratio | 17.41 | 20.19 | 86% |
| Revenue | 68.8B | 24.8B | 277% |
| Total Cash | 4.29B | N/A | - |
| Total Debt | 394B | 33.1B | 1,190% |
MS | SCHW | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 74 | 37 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 86 Overvalued | 84 Overvalued | |
PROFIT vs RISK RATING 1..100 | 6 | 56 | |
SMR RATING 1..100 | 7 | 7 | |
PRICE GROWTH RATING 1..100 | 44 | 48 | |
P/E GROWTH RATING 1..100 | 39 | 80 | |
SEASONALITY SCORE 1..100 | 50 | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
SCHW's Valuation (84) in the Investment Banks Or Brokers industry is in the same range as MS (86). This means that SCHW’s stock grew similarly to MS’s over the last 12 months.
MS's Profit vs Risk Rating (6) in the Investment Banks Or Brokers industry is somewhat better than the same rating for SCHW (56). This means that MS’s stock grew somewhat faster than SCHW’s over the last 12 months.
MS's SMR Rating (7) in the Investment Banks Or Brokers industry is in the same range as SCHW (7). This means that MS’s stock grew similarly to SCHW’s over the last 12 months.
MS's Price Growth Rating (44) in the Investment Banks Or Brokers industry is in the same range as SCHW (48). This means that MS’s stock grew similarly to SCHW’s over the last 12 months.
MS's P/E Growth Rating (39) in the Investment Banks Or Brokers industry is somewhat better than the same rating for SCHW (80). This means that MS’s stock grew somewhat faster than SCHW’s over the last 12 months.
| MS | SCHW | |
|---|---|---|
| RSI ODDS (%) | 3 days ago 47% | 3 days ago 42% |
| Stochastic ODDS (%) | 3 days ago 55% | 3 days ago 46% |
| Momentum ODDS (%) | 3 days ago 75% | 3 days ago 64% |
| MACD ODDS (%) | 3 days ago 50% | N/A |
| TrendWeek ODDS (%) | 3 days ago 55% | 3 days ago 60% |
| TrendMonth ODDS (%) | 3 days ago 54% | 3 days ago 61% |
| Advances ODDS (%) | 5 days ago 65% | 4 days ago 57% |
| Declines ODDS (%) | 3 days ago 58% | 6 days ago 59% |
| BollingerBands ODDS (%) | 3 days ago 60% | 3 days ago 45% |
| Aroon ODDS (%) | 3 days ago 51% | 3 days ago 55% |
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SCHW and
Correlation & Price change
A.I.dvisor indicates that over the last year, SCHW has been closely correlated with RJF. These tickers have moved in lockstep 72% of the time. This A.I.-generated data suggests there is a high statistical probability that if SCHW jumps, then RJF could also see price increases.
| Ticker / NAME | Correlation To SCHW | 1D Price Change % | ||
|---|---|---|---|---|
| SCHW | 100% | -1.21% | ||
| RJF - SCHW | 72% Closely correlated | -0.79% | ||
| LPLA - SCHW | 69% Closely correlated | -1.77% | ||
| NDAQ - SCHW | 62% Loosely correlated | -2.77% | ||
| MORN - SCHW | 57% Loosely correlated | -0.82% | ||
| SPGI - SCHW | 56% Loosely correlated | -1.43% | ||
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