Goldman Sachs (GS) stock fell by roughly 9% on April 3, 2025, closing at $511.02 the day after President Trump’s “Liberation Day” announcement.
A year and a quarter later, the bulge-bracket bank’s stock has doubled, closing at $1,052.98 on Tuesday, an appreciation of roughly 106%.
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A series of banner quarters, despite and, in many respects, because of an unusually turbulent backdrop for financial markets, has spurred the bank on.
“We believe investors need not overcomplicate the investment thesis on Goldman Sachs,” Bank of America analysts Ebrahim Poonawala and Gabriel Angelini wrote. “The stock remains one of the most direct ways to gain exposure to the global capital markets cycle.”
BofA upped its price target on Goldman Sachs to $1,300 from $1,150.
Sweeping tariff announcements, shifting trade negotiations, war and other geopolitical flare-ups, and rapidly changing policy expectations at Kevin Warsh’s Federal Reserve have fueled sharp swings across equities, currencies, and fixed income, generating massive revenues for the bank’s trading desks.
In the bank’s second quarter earnings report, Goldman Sachs reported profits that soared 78% year over year, fueled by a windfall of fees from stock trading and dealmaking. The bank reported $6.6 billion in net earnings, or $21 per share, far exceeding the $14.50 per share expected by analysts, while net revenue increased 39% year over year to $20.3 billion, versus estimates of $16.2 billion.
Revenue from its equities trading division in particular rose 72% year over year to $7.4 billion.
“Clients are turning to us to lead their most strategic and consequential transactions, which are often the genesis of activity across the franchise,” CEO David Solomon said. “Given what we see in our pipelines, we expect this flywheel of activity to continue.”
At the same time, a reopening of the M&A and IPO markets has boosted the bank’s investment banking numbers. Corporate confidence has improved since the uncertainty that followed the “Liberation Day” tariff announcement, helping drive an immense pickup in mergers and acquisitions, debt issuance, and blockbuster initial public offerings.
Goldman’s investment bank reported $3.4 billion in revenue, its highest quarterly figure since 2021, driven by its M&A advisory and equity underwriting groups.
The equity underwriting division, which includes underwriting initial public offerings, earned fees from several of the quarter’s biggest AI-related deals. That includes SpaceX’s (SPCX) blockbuster IPO, where Goldman took the second billing, and Alphabet’s (GOOG, GOOGL) even larger follow-up stock sale. Revenue from that unit jumped 130% to $985 million.
