Squawk on the Street · Oct 14, 2026 · 46m · 38m saved
With Ted Pick, Chairman and CEO of Morgan Stanley · Rob Davis, Chairman and CEO of Merck · Gary Cohn, Vice Chairman of IBM, former Director of the National Economic Council and former President of Goldman Sachs
Morgan Stanley beat forecasts on both revenue and earnings in a quarter in which revenue from its equities division rose 41%.
Ted Pick, chairman and CEO of Morgan Stanley, told Squawk on the Street that the debate over how much the largest cloud computing companies will spend on AI next year matters less than where that spending is heading. Much of the market has been arguing about the size of the bill. Ted said his firm is "double overweight" the theme either way.
"One has to accept the premise that the AI supercycle is a once in a generation, once in a multigenerational phenomenon. And we at Morgan Stanley believe that to be true." — Ted Pick
Ted runs a bank that advises clients across wealth management, investment banking and trading, and it reported $232 billion of wealth-management flows for the quarter. The same hour carried Rob Davis, chairman and CEO of Merck, on the expiry of the Keytruda patents, and Gary Cohn, IBM's vice chairman and a former director of the National Economic Council, on the Fed.
The full episode is covered here so you can skip it. 46 minutes of audio, 8 minutes of reading.
Here are the 10 calls that matter.
Key Takeaways
Morgan Stanley is "double overweight" AI, whatever the exact pace of spending by the largest cloud companies
Ted is "cautiously optimistic about the fourth quarter" if geopolitics settles
Morgan Stanley sees no troubling leverage in its equities business, even after a 41% jump in revenue
Merck sees Keytruda's patent expiry as "a hill, not a cliff"
The under-the-skin version is protected "well into the 2040s"
Merck does not need a large acquisition and will keep deals between $1B and $15B
Gary Cohn rules out an October rate hike and calls December "a pretty clear path"
Lower AI valuations do not mean a bear market, in Gary's view, though returns on AI spending have trailed projections
1. Two Halves of 2026
Ted spoke with CNBC's Leslie Picker at Morgan Stanley's headquarters after the earnings report. He split the year into two stretches. Through July and August, markets were "risk on," carried by the AI boom. In September, inflation, interest rates and oil took over again.
Ted Pick names AI and geopolitics as the two forces behind 2026's markets
"The known unknowns of the year have been the AI phenomenon and geopolitics." — Ted Pick
If geopolitics settles, Ted is "cautiously optimistic about the fourth quarter." He was more bullish still on Morgan Stanley's own position as what he called the "central advisor" to clients across wealth, banking and markets.
