Goldman Sachs posts $4.4bn profit as dealmaking and trading surge

Goldman Sachs reported fourth-quarter profit attributable to common shareholders of US$4.4 billion, or US$14.01 per share, up from US$3.9 billion, or US$11.95, a year earlier. The bank credited a surge in dealmaking, a record showing in equities trading amid volatile markets and a one-time gain tied to its exit from the Apple credit-card partnership for the outperformance.

Equity trading revenue came in at about US$4.3 billion, a level described internally as one of the strongest on record for the Wall Street firm. Fixed Income, Currencies and Commodities trading rose 12.5% to roughly US$3.1 billion, reflecting heavy investor positioning as markets weighed the Federal Reserve’s rate path and the outlook for artificial intelligence investments. Investment banking fees climbed 25% year-on-year to US$2.58 billion, narrowly missing Street estimates centered near US$2.66 billion.

The quarter included a discrete accounting benefit tied to the Apple Card exit. Goldman said it struck a deal under which JPMorgan Chase will take over the Apple Card partnership and that the transaction would boost reported results by US$0.46 per share in the quarter. Management characterized the move as a strategic reduction in consumer-credit exposure and a reallocation of capital toward fee-based and capital-markets businesses.

Goldman’s M&A franchise was a standout. Dealogic data show global M&A volumes rose to US$5.1 trillion in 2025, up 42% from 2024, and Goldman advised on roughly US$1.5 trillion of that volume, earning about US$4.6 billion in M&A fees over the year. That deal flow helped the bank reclaim a leading position globally in advisory work and provided momentum heading into 2026.

CEO David Solomon told analysts the environment is "incredibly constructive" for M&A and capital markets. Management flagged ongoing corporate cash balances, renewed AI-related investment, and a regulatory backdrop that has eased certain constraints on deal activity as supporting factors for continued deal flow.

Markets reacted positively. Shares rose more than 3% in morning trade and finished a reporting season in which the stock had gained over 50% in 2025. The quarter placed Goldman among a cohort of Wall Street banks reporting robust results, underscoring a broader rebound in trading and advisory revenue across the industry.

The results highlight strategic shifts that could shape Goldman’s earnings mix in 2026. The stronger trading and advisory performance reinforces the bank’s pivot toward fee-generating businesses and away from consumer-finance risk. Raising margin targets for its expanding wealth-management unit signals management intent to lock in recurring revenue streams but also exposes the bank to margin pressure as competition for assets intensifies.

Risks remain. Trading income is inherently volatile and sensitive to market sentiment and rate expectations, while advisory revenue depends on continued deal appetite and macro stability. Regulatory changes or a shift in interest-rate dynamics could quickly alter the profit outlook. For now, Goldman enters 2026 with market leadership in equities trading and M&A, but sustaining that position will depend on macroeconomic conditions, competition and evolving regulatory policy.