The “King of Wall Street” is back on the throne.
Goldman Sachs (GS) delivered a massive Q4 profit beat ($14.01 EPS vs $11.67 est), driven by record equity trading revenues and a resurgence in dealmaking. Shares climbed >3% as CEO David Solomon declared the environment “incredibly constructive” for 2026.
📊 THE EARNINGS BREAKDOWN:
- Equities Trading (Record): Revenue hit $4.31 billion (up sharply from $3.45B), capitalizing on AI volatility and the post-election rally.
- Investment Banking: Fees rose 25% to $2.58 billion. While slightly below estimates, the backlog is robust.
- M&A Dominance: Retained the #1 spot globally for 2025, advising on $1.48 trillion in volume (including the $56.5B EA buyout and Alphabet/Wiz).
🏛️ THE STRATEGIC PIVOT: WEALTH WINS Goldman is successfully executing its shift toward stable, fee-based income.
- New Targets: Raised medium-term pre-tax margin targets for Asset & Wealth Management to 30% (up from mid-20s).
- AUM Growth: Assets Under Supervision grew to $3.61 trillion.
- Management Fees: Hit a quarterly record of $3.09 billion.
🚀 2026 OUTLOOK: THE IPO SUPER-CYCLE Solomon and team are gearing up for a blockbuster year in capital markets.
- The Drivers: Lower rates, regulatory clarity under the Trump administration, and pent-up demand.
- The Pipeline: The bank is positioning for potential mega-listings from SpaceX, OpenAI, and Anthropic after leading Medline’s record 2025 IPO.
💡 ANALYST TAKEAWAY: Goldman has successfully shed its “Consumer Hangover.” By unwinding the Apple Card partnership (releasing $2.48 billion in reserves), the firm has removed a major drag just as the 10% rate cap threat looms over rivals. With operating leverage kicking in and a dividend hike to $4.50, management is signaling extreme confidence in a multi-year capital markets upcycle.
👇 Bankers: Is the M&A boom back for real in 2026, or is it just limited to AI and Tech consolidation?