Goldman Sachs jumps after earnings beat and stronger deal backlog

Goldman Sachs shares climbed Tuesday after the bank reported second-quarter revenue and profit well above Wall Street estimates, according to LSEG data cited by CNBC. For everyday investors, the report shows how quickly Goldman can benefit when markets are active, companies are raising money and big clients need trading help.

CNBC’s Investing Club said it raised its price target, an estimate of what a stock could be worth, on Goldman Sachs to $1,200 from $1,050 while keeping a hold-equivalent rating. The club said Goldman’s quarter and CEO David Solomon’s outlook supported the higher target, while noting it did not want to chase the stock after the move.

Revenue for the quarter ended in June rose 39.5% from a year earlier to $20.34 billion, above the $16.13 billion consensus estimate from LSEG, according to CNBC. Earnings per share, which measures profit allocated to each share, rose 92% to $20.98, compared with the $14.48 consensus estimate.

Goldman shares were up 7.5% and on track for their best one-day move in more than a year, CNBC reported. The stock also reached an intraday record near $1,136. Goldman would need to close above $1,106.37, its June 22 closing high, to set a record close, according to CNBC.

Wall Street activity powered the quarter

Goldman’s global banking and markets division drove most of the beat. Revenue in that unit rose 53% from a year earlier and 22% from the prior quarter to $15.52 billion, CNBC reported, $3.8 billion above consensus.

Investment banking revenue totaled $3.4 billion, up 55% from a year earlier and ahead of the $2.8 billion consensus estimate. CNBC said the figure included fees tied to SpaceX’s initial public offering and $25 billion bond sale, as well as Goldman’s role in Alphabet’s $85 billion equity raise announced in June. Equity underwriting revenue rose 130%, while debt underwriting revenue rose 70%, according to CNBC.

Trading also delivered. Equities revenue rose 72% to $7.42 billion, compared with expectations of $5.05 billion. Fixed income, currency and commodities revenue, a category covering bonds, foreign exchange and raw-material markets, rose 32% to $4.6 billion, above the $3.7 billion consensus, CNBC reported.

Volatility helped. CNBC said stocks rebounded from Iran-war lows during the quarter, while oil and bond markets swung sharply. Trading desks often make more money in volatile periods because clients trade more and need banks to provide liquidity, meaning the ability to buy or sell without severely moving prices.

Management pointed to a bigger pipeline

Solomon said on Goldman’s earnings call that the firm’s investment banking backlog rose to its highest level in five years and its second-highest level on record, according to CNBC. A backlog is work the bank expects to turn into future revenue, though timing and completion are not guaranteed.

Solomon also said CEOs are considering large strategic deals, and he linked part of the pickup to a more accommodating stance on mergers under the Trump administration, CNBC reported. Advisory revenue, which includes merger-and-acquisition work, rose nearly 18% but came in slightly below expectations.

Goldman also has exposure to the artificial intelligence funding cycle. CNBC reported that OpenAI and Anthropic have submitted confidential filings with U.S. regulators, with Goldman among the banks leading the offerings, though timing remains unclear. Reuters reported Tuesday that data center operator Switch hired Goldman as a lead underwriter for its planned IPO.

Asked about AI investment risk, Solomon said Goldman is larger and more diversified than it was during the dot-com era, while acknowledging that investment cycles can cool and reset, according to CNBC.

Wealth management added steadier revenue

Goldman’s asset and wealth management revenue rose 20% from a year earlier to $4.6 billion, topping the $4.31 billion consensus estimate. Assets under supervision reached a record $4.04 trillion after increasing by $391 billion, CNBC reported.

CNBC said Goldman also landed $70 billion in combined retirement assets from Verizon and Lockheed Martin early in the third quarter. Solomon said the firm has seen nearly 900 referrals from investment banking to wealth management since the start of 2025.

Key profitability metrics were strong. Goldman’s efficiency ratio, expenses divided by revenue where lower is better, fell to 57.4%, described by CNBC as a multiyear low. Return on tangible common equity, a measure of profit generated from shareholder capital, was 25.5%.

Goldman’s smaller platform solutions segment posted revenue of $221 million, down 64% from a year earlier, mainly because of the sale of its Apple credit card business to JPMorgan, CNBC reported. CFO Denis Coleman said on the call that revenue in the segment should be broadly consistent with the second quarter for the rest of the year.

This story draws on original reporting from CNBC.