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GS Q3 Deep Dive: Investment Banking Rebound and Strategic Expansion Shape Outlook

By: StockStory

October 15, 2025 at 01:30 AM EDT

GS Cover Image

Global investment bank Goldman Sachs (NYSE: GS) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 19.6% year on year to $15.18 billion. Its GAAP profit of $12.25 per share was 10.5% above analysts’ consensus estimates.

Is now the time to buy GS? Find out in our full research report (it’s free for active Edge members).

Goldman Sachs (GS) Q3 CY2025 Highlights:

Revenue: $15.18 billion vs analyst estimates of $14.21 billion (19.6% year-on-year growth, 6.8% beat)
EPS (GAAP): $12.25 vs analyst estimates of $11.09 (10.5% beat)
Adjusted EBITDA: $5.92 billion (39% margin, 27.4% year-on-year growth)
Operating Margin: 35.5%, up from 31.7% in the same quarter last year
Market Capitalization: $244 billion

StockStory’s Take

Goldman Sachs delivered third quarter results that exceeded Wall Street expectations, driven by a resurgence in investment banking activity and resilient performance across its trading businesses. Management emphasized the firm’s leadership in mergers and acquisitions, highlighting a substantial rebound in completed deals and a deep advisory pipeline. CEO David Solomon credited the “multiplier effect” of the firm’s integrated approach, noting that M&A activity is feeding opportunities in financing and other businesses. The quarter also saw continued growth in asset and wealth management, with a record $3.5 trillion in assets under supervision and robust fundraising in alternatives.

Looking ahead, Goldman Sachs management expects ongoing strength in investment banking, supported by heightened sponsor activity, a constructive regulatory environment, and anticipated interest rate cuts. Solomon described the opportunity landscape as “very constructive,” particularly in M&A and private market solutions, and outlined the firm’s commitment to scaling new growth channels through technology and partnerships. The recently launched One Goldman Sachs 3.0 initiative, propelled by artificial intelligence, is expected to drive operational efficiency, enhance client experience, and create capacity for further strategic investments.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to increased M&A momentum, robust growth in asset and wealth management, and ongoing efficiency initiatives fueled by technology.

M&A activity surge: Management reported a significant increase in advisory revenues, driven by a recovery in merger and acquisition activity and several high-profile transactions in the technology and industrial sectors.
Alternatives fundraising momentum: Asset and wealth management saw record inflows, with alternative asset fundraising exceeding prior expectations and broad-based demand across private equity and credit strategies.
IPO and debt underwriting recovery: The firm benefited from a pickup in initial public offerings and leveraged finance, with equity and debt underwriting revenues both rising sharply year over year.
Financing revenues expand: Goldman Sachs’ financing businesses, including prime brokerage and structured lending, continued to grow, now accounting for nearly 40% of overall trading revenues, reflecting a strategic focus on durable, fee-based income streams.
Operational transformation via AI: The launch of One Goldman Sachs 3.0 marks a shift toward centralizing operations and leveraging AI to streamline processes, improve profitability, and build scalable growth capacity over several years.

Drivers of Future Performance

Goldman Sachs’ outlook for the next year is anchored in further investment banking growth, ongoing asset and wealth management expansion, and efficiency gains from technology adoption.

Investment banking pipeline strength: Management expects the elevated advisory backlog and increasing sponsor activity to drive sustained momentum in M&A, equity underwriting, and debt issuance, especially as market confidence grows and regulatory headwinds recede.
Scaling asset management platform: The firm plans to accelerate growth in asset and wealth management by executing targeted acquisitions, expanding partnerships, and launching new alternative investment offerings, with a goal of improving margins and producing more stable fee income.
AI-driven efficiency and risk management: The One Goldman Sachs 3.0 initiative is expected to enhance productivity, streamline risk management practices, and free up resources for investment in high-growth segments, though management acknowledged that the transformation will be gradual and closely monitored for measurable results.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace and breadth of M&A and capital markets activity as a signal of investment banking momentum, (2) measurable progress on the rollout and impact of the One Goldman Sachs 3.0 AI-driven operational model, and (3) continued growth and margin improvement in asset and wealth management. Execution on recent acquisitions and partnerships will also be key markers of strategic progress.

Goldman Sachs currently trades at $773, down from $787.91 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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