What is M&A and why does it matter for these stocks?

M&A stands for Mergers and Acquisitions - when companies combine with or buy other companies. Investment banks, advisory firms, and private equity companies in this stock group earn significant fees by helping plan, finance, and execute these deals. When M&A activity increases (as it has by 30% to $1.89 trillion), these firms typically earn more revenue, potentially boosting their stock performance.

What's the difference between investment banks and private equity firms in this group?

Investment banks (like Goldman Sachs and Morgan Stanley) primarily provide advisory services and help arrange financing for large deals. They earn fees for their expertise and connections. Private equity firms (like Blackstone and KKR) actually invest in companies, buying and selling them to generate returns. Both benefit from increased M&A activity, but in different ways - banks through advisory fees, and private equity through more opportunities to buy and sell companies.

What are "megadeals" and why are they important to these stocks?

Megadeals are very large corporate transactions valued at over $10 billion. They're significant because they generate especially large advisory fees for investment banks and create major opportunities for private equity firms. The 74% increase in megadeals mentioned represents a substantial revenue opportunity for the financial firms in this group, as these complex transactions require extensive advisory services and financing arrangements.

How might economic conditions affect these M&A-focused stocks?

These stocks tend to perform best during periods of economic expansion and market optimism, when companies feel confident enough to pursue large acquisitions. If economic conditions worsen or uncertainty increases, M&A activity might slow down, potentially impacting the earnings of these financial firms. That's why the current 30% surge in deal activity is a positive signal for companies in this group.

What is an "advisory fee" that these firms earn?

An advisory fee is what investment banks and specialized firms charge for providing expert guidance on transactions like mergers and acquisitions. These fees are typically calculated as a percentage of the total deal value (often between 0.1% and 2%, depending on deal size). For example, on a $10 billion transaction, a 1% advisory fee would result in $100 million in revenue. The larger the deal, the larger the potential fees, which explains why increased megadeal activity directly benefits these financial firms.

15 handpicked stocks

Megadeal Mania

The world of big business deals is booming, with global merger activity up 30% to $1.89 trillion. This collection features the financial powerhouses behind these massive transactions – the investment banks, advisory firms, and private equity giants that stand to profit from the deal-making surge.

Han Tan | Market Analyst

Published on June 30

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Goldman Sachs Group, Inc., The

Current price

$779.44

As a leading global investment bank, Goldman Sachs is explicitly mentioned in the report as leading dealmaking, positioning it to directly capitalize ...

As a leading global investment bank, Goldman Sachs is explicitly mentioned in the report as leading dealmaking, positioning it to directly capitalize on the surge in M&A advisory fees.

Morgan Stanley

Current price

$155.76

Morgan Stanley is a top-tier M&A advisor that stands to benefit from the significant increase in the value and volume of large-scale corporate transac...

Morgan Stanley is a top-tier M&A advisor that stands to benefit from the significant increase in the value and volume of large-scale corporate transactions.

JPMorgan Chase & Co.

JPM

Current price

$307.73

JPMorgan's extensive investment banking division is a key player in structuring and financing megadeals, making it a primary beneficiary of increased ...

JPMorgan's extensive investment banking division is a key player in structuring and financing megadeals, making it a primary beneficiary of increased M&A activity.

Blackstone Inc

Current price

$166.58

KKR & Co. L.P.

KKR

Current price

$124.63

Carlyle Group, The

Current price

$61.72

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+0.98%

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About This Group of Stocks

Our Expert Thinking

Megadeals (transactions over $10 billion) have surged by an impressive 74% year-over-year, signaling a wave of corporate confidence. These financial intermediaries are uniquely positioned to benefit from this trend, earning substantial fees from advising on, structuring, and financing these massive transactions.

What You Need to Know

These stocks tend to perform best during periods of economic expansion and market optimism. When companies feel confident enough to pursue large acquisitions, these financial firms directly benefit through advisory fees, financing arrangements, and strategic services that generate significant revenue.

Why These Stocks

This collection includes industry-leading investment banks, specialized M&A advisory firms, and major private equity players. Each company was selected for its strong position in facilitating large corporate transactions and its ability to capitalize on the current deal-making boom.

Group Performance Snapshot

0.91%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 0.91% over the next year.

9 of 15

Stocks Rated Buy by Analysts

9 of 15 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🚀

The Deal Wave Is Here

With megadeal activity skyrocketing 74%, these financial giants are suddenly in high demand. Their specialized services become essential when billion-dollar transactions are on the table.

💰

Fee Revenue Bonanza

M&A advisory fees can be massive - sometimes reaching tens or even hundreds of millions for a single transaction. As deal values climb to $1.89 trillion, so do the potential earnings for these firms.

🔍

Hidden Economic Signal

Rising M&A activity often signals broader economic confidence that other investors might miss. These stocks could be early indicators of a positive market shift that's just beginning to take shape.

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