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LivestreamMenuGoldman Sachs reported a blowout quarter Tuesday, fueled by booming activity on Wall Street, sending shares to fresh all-time highs. The stellar results, coupled with CEO David Solomon’s rosy outlook, reinforce our desire to own the investment banking giant in a moment tailor-made to its strengths. Revenue in the second quarter rose 39.5% year over year to $20.34 billion, crushing the consensus of $16.13 billion, according to LSEG. Earnings per share (EPS) in the three months ended in June surged 92% to $20.98, a huge beat versus the $14.48 consensus, according to LSEG data. Shares of Goldman jumped 7.5% and are on pace for their best single-day move in over a year. The stock also set a new intraday record high of roughly $1,136 apiece. To close at a record, Goldman needs to end the day above $1,106.37, its current closing peak set on June 22. GS 1Y mountain Goldman Sachs 1-year return Bottom line Expectations were high for Goldman Sachs, which during the period co-led SpaceX’s record-breaking initial public offering, helped steer Alphabet’s enormous secondary stock sale, and advised on the $67 billion NextEra-Dominion Energy merger . Plus, the stock market had a big rebound from its Iran war lows, while oil prices and bonds whipsawed — an ideal backdrop for Goldman’s trading desks, which thrive on volatility. Despite all these well-known wins, Goldman still blew past estimates. Jim Cramer summed it up like this: Everyone expected a good quarter, “but not this good.” Goldman’s three most important businesses — investment banking, trading, and asset and wealth management — all exceeded consensus revenue expectations, unlike in the first quarter of this year, when only investment banking delivered a clean beat. Additionally, key metrics used to evaluate a bank’s performance were also much better than expected. In particular, Goldman’s efficiency ratio — calculated by dividing the firm’s expenses by its revenues — was 57.4%, a multiyear low (lower is better here). Return on tangible common equity, a measure of how efficiently the bank generates profits from its capital, was 25.5%. While the second quarter featured some extraordinary deals, Goldman struck an upbeat tone on the pipeline of future activity — and that’s notable for anyone worried about the sustainability of the performance. “Even with very strong investment banking revenues this quarter, our backlog increased to its highest level in five years and its second highest level on record, underpinned by a record advisory backlog and reflecting the strength and breadth of our client engagement,” chief executive Solomon said on the earnings call. Advisory work typically involves mergers and acquisitions (M & A). Solomon indicated that part of the investment banking business is benefiting from the Trump administration’s more accommodative stance on takeovers and tie-ups. This follows tougher enforcement during the Biden era. “CEOs are dreaming and thinking about really large, structurally scale-enhancing opportunities. That is leading to just a lot more strategic activity,” Solomon said, adding:” They’ve got a multiyear window where they can potentially execute on it.” On the IPO side, artificial intelligence giants OpenAI and Anthropic have both submitted confidential filings with U.S. regulators, and while the timing of those megadeals is unclear, Goldman is among the banks leading the offerings. It’s not just the leading AI labs filling the pipeline. Data center operator Switch has hired Goldman as a lead underwriter for its planned IPO, Reuters reported on Tuesday . The news underscores the myriad ways in which the AI boom is driving Goldman’s business. From IPOs to soaring debt and equity issuance to fund AI infrastructure projects, Goldman is involved. The flip side is that it leaves Goldman vulnerable to a slowdown in AI investments. Asked about this on the call, Solomon offered a level-headed response, saying he’s aware of the history of past tech booms, but stressed Goldman looks different now than it did two-plus decades ago, when the dot-com bubble burst. “The firm is so much bigger, so much more diverse, has so many more earnings engines, has so much more durable revenue than it had the last time we saw a significant investment cycle like this,” Solomon said. “Could this ebb and flow? Absolutely. It will, as it has in any other cycle,” he added. “Ultimately, you will have a recalibration, a reset, a drawdown, and then a further acceleration. That’s what the path generally looks like. … As we manage the firm, that’s something we’re thinking carefully about.” Goldman’s asset and wealth management business is a key source of that more durable revenue base. Its assets under supervision reached a new record in the June quarter, and early into the third quarter, Goldman landed $70 billion in combined retirement assets from Verizon and Lockheed Martin , supporting future growth. “Those are the businesses that didn’t seem to matter, but they’re so big now that they do seem to matter,” Jim said Tuesday, referring to asset and wealth management. Under Solomon, Goldman has worked to leverage the bank’s client relationships in one area to benefit its other businesses — say, getting a CEO whose company tapped Goldman’s bankers for an M & A deal to use Goldman for their personal wealth advisory. This sort of “flywheel effect” can also be at play with IPOs that mint millionaires and even billionaires. Solomon said that since the start of 2025, Goldman has seen nearly 900 referrals from its investment banking unit to its wealth management unit. The firm is stepping up its investments in wealth management, Solomon said, because it sees the opportunity for even more growth. “The growth in very wealthy people that have investable assets is expanding at an even faster pace.” This is something long-term investors in the bank’s stock should appreciate, as it will continue to help Goldman grow earnings more sustainably over time. That could ultimately allow the bank’s stock to command a higher price-to-earnings multiple than if it were more heavily reliant on trading and investment banking. Goldman also continues to invest in the adoption of artificial intelligence by its rank-and-file, seeking ways to make the company more efficient and productive. CFO Denis Coleman said, while Goldman is already finding ways to deploy AI, particularly on the software engineering side, “I think, frankly, it is still early.” “We want our world-class people to be more productive and do more for clients. As they become more productive, they may feel less need to replace people who, in the ordinary course, flow through the system. Right now, it’s not a moment for a structural rework of our human capital footprint. It’s a moment to invest and utilize this technology and learn how to deploy it in the best possible way for our people and our clients.” While we still see plenty to like, we’re reiterating our hold-equivalent rating on Goldman because it’s not our style to chase moves like this. However, we are increasing our price target to $1,200 a share, up from $1,050. Segment results Goldman’s global banking and markets division delivered a monster beat, with revenue rising 53% year over year and 22% sequentially to $15.52 billion. That came in $3.8 billion ahead of the consensus, driving most of the top-line beat. Within the segment, investment banking revenue totaled $3.4 billion, up 55% from a year ago, and ahead of the $2.8 billion consensus. This is the line item housing the fees from SpaceX’s IPO and $25 billion bond sale during the quarter. It also includes the money earned from co-leading Alphabet’s massive $85 billion equity raise , which was announced in June. Unsurprisingly, both Goldman’s equity and debt underwriting revenue exceeded estimates, rising 130% and 70%, respectively. Advisory revenue, the third pillar of the investment-banking business, was a slight miss, up nearly 18%. This largely consists of the bank’s work on M & A transactions. We’re not too concerned about the shortfall, considering the second half of the year is on track to be busy on the M & A front. Plus, data from LSEG show that Goldman was No. 1 in global M & A fees in the first half of 2026, so its position relative to peers remains strong. Equities revenue surged 72% to $7.42 billion, smashing expectations of $5.05 billion. The strength was partially driven by “significantly higher” revenues in equities intermediation — that’s Goldman acting as a market maker for deep-pocketed clients like hedge funds, facilitating large trades of regular stocks and derivatives. The financing side of the equities business, where Goldman lends cash and securities to hedge funds, also saw “significantly higher” revenue. Across the equities business, management on the earnings call noted strength in Asia-based clients and said their deliberate investments to better serve that market are paying off. Fixed income, currency, and commodities (FICC) revenue rose 32% to $4.6 billion, topping the $3.7 billion consensus. This is an encouraging result after weaker-than-expected FICC revenue last quarter was a big blemish on the January-to-March results. In a quarter filled Now, moving to Goldman’s asset and wealth management (AWM) segment, where revenue of $4.6 billion beat the $4.31 billion consensus. Compared with a year ago, revenue was up 20%. Similar to FICC trading, we’re glad to see the AWM business get back to beating expectations after a first-quarter miss. While a much smaller share of Goldman’s total revenue than the banking and markets division, this segment is important to the bank’s performance through the ups and downs of economic cycles. Its revenue streams tend to be recurring rather than episodic, unlike those of investment banking and trading. Most of AWM revenue is a percentage of a firm’s assets under management, so the more money that Goldman oversees, the better. On that note, assets under supervision (AUS) ended the quarter at a record $4.04 trillion, increasing by $391 billion. Platform solutions, the firm’s third and final reporting segment, is tiny and no longer core to the investment story. Revenue totaled $221 million, down 64% from a year earlier. The decline primarily stems from Goldman’s sale of its Apple credit card business to JPMorgan — a smart move to pare back its consumer banking ambitions. For the rest of the year, Coleman said on the earnings call that revenue in this segment should be “broadly consistent” with the second quarter. (Jim Cramer’s Charitable Trust is long GS, GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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