By Paul R. La Monica

Mergers are definitely back on Wall Street -- and all the dealmaking is one more thing driving the stock market to dizzying highs.

In just the past couple of days, Berkshire Hathaway announced that it's buying home builder Taylor Morrison for $8.5 billion and Barry Diller's People Inc. is offering $18 billion for casino stalwart MGM Resorts International.

And one data expert, Mergermarket's Lucinda Guthrie, thinks the M&A party will go on for a while.

The Berkshires of the world -- mega-companies with lots of cash and no debt -- are looking to gobble up their smaller rivals, Guthrie told Barron's.

There is "a hunt for scale from large-caps" that want to both cut costs and find new ways to grow, said Guthrie, who heads the capital markets data provider.

Also circling are companies that can use their surging shares as currency for deals.

Right now, gaming and housing are hot sectors for M&A. Casino names showed it on Monday, homebuiders not so much. Wynn Resorts, Penn Entertainment, and Las Vegas Sands were all up at least 5%. Toll Brothers was essentially flat and Lennar inched up 0.4%.

Pharmaceuticals and banks were ripe for the picking in the first few months of 2026 -- and more deals in those sectors wouldn't be a surprise, experts told Barron's.

This year, in fact, has been a banner one for M&A -- $2.5 trillion in deals, up 39% from the same time a year ago, according to Dealogic. For context, it's the highest deal volume through the first five months of the year since 2021.

A glance at the numbers shows why records are at risk of falling. Caesars Entertainment is being taken private by Fertitta Entertainment for $17.6 billion. And building supplies company QXO, a 2025 Barron's stock pick , is plunking down $17 billion for insulation maker TopBuild.

Besides Caesars and QXO, May brought a flurry of deals.

Electric utility NextEra Energy is paying pay $67.1 billion for Dominion Energy, a 2025 Barron's stock pick .

Given how hungry AI data centers are for power, more utility mergers are probably in the wings. The NextEra deal came only two months after a consortium led by BlackRock's Global Infrastructure Partners and Swedish private-equity firm EQT agreed to buy utility AES for $33.4 billion.

Also in May was a deal by real estate investment trust Equity Residential. It is buying fellow apartment REIT, AvalonBay Communities, for $26.3 billion.

GameStop was stopped dead in its tracks, though. It made an unsolicited $55.5 billion takeover bid for eBay, which eBay rejected.

Still, there are plenty of other merger targets.

Biotechs are at the top of the list for Glenn Dorsey, who is the head of client portfolio management at Clark Capital. He wouldn't be surprised if more Big Pharma companies scoop up smaller biotechs to boost their pipelines.

There already has been a flurry of deals this year: Eli Lilly, Merck, and Gilead Sciences all have announced notable biotech acquisitions. That's a key reason why the State Street SPDR S&P Biotech ETF has soared nearly 70% over the past 12 months.

Dorsey said he also expects to see more financial firms look to merge. Regional banks that want to acquire more assets and deposits are particularly inclined to do deals. In February, Webster Financial agreed to sell to Banco Santander for more than $12 billion. And Fifth Third completed its merger with Comerica earlier this year.

Financials, pharmaceuticals, casinos, home builders, utilities. Whew. We need to rethink our question. We need to make it simpler for you to figure out where to invest.

It isn't what sectors are primed for M&A deals. It's what sectors aren't. That shortens the target list.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 02, 2026 00:01 ET (04:01 GMT)

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