Goldman Sachs Stock Soars: Why Earnings Outperformance Matters for 2026

• Goldman Sachs exceeded fourth-quarter earnings estimates by 20.2%, driven by strong performance in investment banking and trading.
• The firm's equities-trading revenue hit a record $4.31 billion, and investment banking fees jumped 25% year-on-year.
• A 46-cents-per-share gain from the Apple Card deal and reduced credit loss provisions bolstered bottom-line results.

In the past two years, Goldman Sachs has seen its tangible book value per share (TBVPS) grow by 10.8% and its return on average common shareholders' equity (ROE) hit 15.0% for 2025. This reflects a strategic pivot by CEO David Solomon, who has repositioned the firm away from consumer banking toward core Wall Street strengths like equities and investment banking according to earnings reports.

Goldman's Q4 2025 results show the firm is capitalizing on a turbulent market environment shaped by Trump-era policy shifts. These policies have driven volatility in equities, fixed income, and commodities, creating opportunities for trading desks across Wall Street. Goldman's investment banking revenue increased by 12% year-on-year in the fourth quarter, outpacing many of its peers. In fact, its equity trading fees rose to $4.3 billion, exceeding analyst expectations by nearly $700 million and setting a new Wall Street benchmark.

Beyond its core trading and investment banking operations, Goldman also benefited from the offloading of its Apple Card business to JPMorgan Chase. This deal contributed a 46-cent-per-share gain and a $2.48 billion reduction in loan loss reserves, directly boosting net income and earnings per share. Despite a 3% year-on-year revenue decline, the firm's GAAP earnings per share came in at $14.01—well above the $11.65 consensus estimate. This outperformance was supported by a 10.8% growth in TBVPS and strong returns on equity.

For investors, these results signal that Goldman Sachs is well-positioned in a volatile but active market. Its strategic refocusing on core Wall Street strengths has led to better capital efficiency and stronger returns. However, risks remain, particularly for the firm's asset and wealth management business, which is sensitive to broader equity market performance. Additionally, while the Apple Card sale may have provided a short-term gain, its long-term impact on Goldman's consumer banking strategy remains to be seen.

Looking ahead, investors should watch Goldman's first-quarter performance, particularly in the equities and investment banking segments, as well as its ability to sustain its momentum in a shifting regulatory and interest rate environment. If the firm can maintain or accelerate its current pace, it may justify the premium valuation seen in its forward P/E multiple. A strong performance from Goldman in the coming quarters could also signal broader strength in the financial sector, potentially triggering a market rotation back into financial stocks.

Is Goldman Sachs Stock a Buy in 2026 Based on Q4 Earnings?

Goldman's fourth-quarter earnings suggest that it is a compelling candidate for long-term investors seeking exposure to the financial sector. The firm's strong performance in trading, M&A, and its strategic shift away from underperforming consumer banking ventures have improved its capital allocation and return profile. Its dividend increase to $4.50 per share also points to confidence in future earnings sustainability. Still, investors must consider the broader market dynamics and potential policy shifts that could impact trading activity and dealmaking trends.

What Drives Goldman Sachs' Earnings Performance in 2025 and 2026?

Goldman's recent earnings outperformance is driven by three key factors: strong trading revenue in a volatile market environment, a rebound in dealmaking and investment banking, and strategic divestitures like the Apple Card sale. The firm's return on equity of 15.0% in 2025 and its 10.8% growth in tangible book value over two years highlight its ability to generate consistent returns. Looking forward, Goldman's success will depend on its ability to adapt to evolving market conditions and continue leveraging its core strengths in trading and advisory services.

Why Is Goldman Sachs' Tangible Book Value Important for Investors?

Tangible book value per share (TBVPS) is a key metric for investors because it represents a firm's net asset value after subtracting intangible assets like goodwill and patents. For Goldman, a 10.8% annualized increase in TBVPS over the last two years indicates strong balance sheet management and capital discipline. A rising TBVPS is particularly important for banks like Goldman, where asset quality and equity growth are critical for maintaining investor confidence and supporting dividend and share repurchase programs. As the firm continues to shift toward more profitable areas like trading and investment banking, its TBVPS is likely to remain a key indicator of its financial health.

What Can We Expect From Goldman Sachs in Q1 2026?

Goldman's ability to maintain or exceed its current performance will depend on several factors, including continued dealmaking activity, market volatility, and regulatory developments. The firm has expressed optimism about 2026, with CEO David Solomon noting high client engagement across its business lines. If broader economic conditions remain supportive, Goldman may continue to outperform expectations. However, any slowdown in M&A activity or a shift in market dynamics could challenge its performance. Investors should monitor the firm's upcoming reports for guidance and management commentary on its outlook for the year ahead.