Goldman Sachs reported a stronger-than-expected profit in the fourth quarter on Thursday, driven by an uptick in deal activity and increased trading revenue during a volatile market period.
The bank’s traders capitalized on market fluctuations and an overall gain in U.S. markets as investors speculated on the Federal Reserve’s interest rate decisions and the future of AI firms.
Equity revenue surged to a record $4.31 billion, up from $3.45 billion the previous year, while revenue from fixed income, currency, and commodity trading increased by 12.5%, reaching $3.11 billion.
Goldman also finalized a deal with JPMorgan Chase & Co. to take over a partnership, which is projected to add 46 cents to its earnings per share.
Overall earnings per share were $14.01, surpassing the $11.67 forecasted by analysts, according to LSEG’s data.
In addition, the bank announced an increase in its quarterly dividend to $4.50 per share for the first quarter, signaling expectations for a robust year ahead.
Stephen Biggar, a banking analyst at Argus Research, remarked, “The dividend increase is a clear sign of management’s confidence in ongoing revenue growth.” Meanwhile, the forgiving regulatory environment, coupled with low interest rates and abundant cash during the Trump administration, has spurred businesses to pursue more deals.
Goldman’s investment banking fees rose by 25% compared to last year, reaching $2.58 billion, although it slightly fell short of the $2.66 billion analysts anticipated.
The bank’s stock grew more than 50% in 2025, although it dipped nearly 2% during premarket trading.
Goldman advised on several significant mergers last year, including Electronic Arts’ $56.5 billion leveraged buyout and Alphabet’s $32 billion acquisition of Wiz, a cloud security firm. These major transactions solidified Goldman’s position as the top bank for global M&A, advising on $1.48 trillion in deals and earning $4.6 billion in fees.
Leading dealmakers expect the increasing trend of mergers—approaching record levels in 2025—to persist this year, particularly due to significant investments in technology and AI.
According to Dealogic, global M&A volumes are expected to reach $5.1 trillion in 2025, a 42% rise from 2024.
Goldman also adjusted its pre-tax margin target for its asset and wealth management sector from the mid-20% range to 30% over the medium term, noting that its current pre-tax profit margin stood at 25% in 2025.
Additionally, the bank earned a record $3.09 billion in management fee income for a quarter, as it continues to focus on more stable income streams rather than relying solely on the fluctuating trading and investment banking sectors.
Last month, Goldman announced plans to acquire Innovator Capital Management, an active exchange-traded fund provider, for $2 billion.
Assets under the bank’s management climbed to $3.61 trillion, up from $3.14 trillion a year earlier.
Despite recent disruptions like government shutdowns, the IPO market has shown signs of recovery, albeit with some delays. Firms such as SpaceX, OpenAI, and Anthropic are preparing for potential listings in 2026, and advisers like Goldman are competing for these U.S. listings.
In the same quarter, Goldman was the principal underwriter for Medline’s IPO, which is anticipated to be the largest public offering of 2025.
Notably, Goldman is now stepping away from its consumer business, as seen with the retirement of Apple Card. This move follows concerns from other financial institutions regarding President Trump’s proposal to limit credit card interest rates to 10%.
Goldman’s earnings also benefited from releasing $2.48 billion from its inventory to cover expected card loan losses, with Morningstar estimating the bank could gain $145 million from this deal.
