Goldman Sachs advises companies and governments on mergers, raises money for them by selling their stocks and bonds, and trades securities for big investors such as hedge funds and pension funds. It led Ford Motor's 1956 stock market debut, then the largest share sale in US history. Traders buy and sell stocks, bonds, currencies, and commodities for clients and lend them money, while bankers earn a fee on each deal they advise on or arrange. Its asset and wealth management arm invests for institutions and wealthy families and charges fees based on the money it oversees. The firm was founded in 1869, when it began brokering short-term IOUs for New York merchants, and it is based in New York City.
Company Size
10,001+
Company Stage
IPO
Headquarters
New York City, New York
Founded
1869
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Morgan Stanley (MS) shares fell nearly 3% on Wednesday, even after third-quarter revenue rose 12% to $20.3 billion from $18.2 billion a year earlier and beat forecasts. Goldman Sachs also beat estimates, yet it lost another 1.5%. CNBC host Jim Cramer blames worries about sticky inflation and climbing rates, not weak results. "It's not easy to own these bank stocks right now," he said. Institutional Securities revenue grew 18% to $10 billion, while fixed income fell 7%. Wealth management revenue rose 10%, and client assets reached a record $10.5 trillion. Cramer said a resolution to the war in Iran could cool inflation and give the Federal Reserve room to hold off on rate hikes.
All six major US bank stocks fell after third-quarter earnings, even as several banks posted strong results. CNBC's Jim Cramer said investors are worried about persistent inflation, rising interest rates, and shaky capital markets. Citigroup revenue grew 8%, its best third quarter in a decade, yet shares dropped 5.6%. Goldman Sachs beat estimates, with investment banking fees up 21%, but its stock finished lower. Bank of America missed expectations and faced a $1.2 billion regulatory penalty; shares fell roughly 5%. Cramer sees buying opportunities. His Charitable Trust upgraded Wells Fargo and Goldman Sachs to buy-equivalent ratings.
Momei Qu, head of venture at PSP Growth, says Goldman Sachs and JPMorgan are becoming artificial intelligence (AI) stocks. She told Bloomberg's The Close that banks are tied to the AI buildout through debt financing, potential initial public offerings (IPOs) and mergers, though earnings do not show it yet. Lending was a bright spot last quarter. JPMorgan, Citigroup, and Wells Fargo posted a record $56.5 billion in combined net interest income, and JPMorgan's $107 billion outlook, excluding markets, beat the $103 billion consensus. Qu said investors are split on AI valuations: one camp excuses thin margins and heavy spending, while the other wants proof of returns. Anthropic holds its pre-IPO investor day on Wednesday. Bloomberg Intelligence analyst Herman Chan expects the Anthropic IPO to lift Goldman Sachs and Morgan Stanley. He warned that slower AI spending could cut banks' fee revenue from data center bond deals.
Four of Wall Street's biggest banks reported third quarter dealmaking fees of $8.47 billion, up 15% from a year earlier but down 7.5% from a banner second quarter. Goldman Sachs, JPMorgan Chase, Citigroup, and Wells Fargo said activity remains strong despite market volatility and higher borrowing costs. JPMorgan chief financial officer Jeremy Barnum said deals were "delayed rather than canceled" after a slowdown in late September, when volatility widened the gap between what buyers and sellers would accept. Goldman's fees rose 22% to $3.2 billion, led by record M&A advisory revenue. Wells Fargo's rose to $894 million, and Citigroup's rose 9% to $1.35 billion. Goldman chief executive officer David Solomon said some companies postponed initial public offerings (IPOs) in September rather than accept valuations 10% to 15% lower.
Goldman Sachs' equity trading revenue jumped 72% year over year to $6.44 billion in the third quarter, almost twice the $3.47 billion from fixed income. JPMorgan Chase's bond desk missed estimates by more than $500 million. JPMorgan's fixed income revenue fell 4% to $5.4 billion, its first decline in more than two years. Its equities desk rose 49% to $5.0 billion. Herman Chan, a senior US banks analyst at Bloomberg Intelligence, blamed expectations of prolonged high rates, which kept clients on the sidelines in September. "Goldman was the gold standard for the third quarter," he said. Higher rates still helped lenders. JPMorgan's net interest income rose 12.8% to $27.04 billion.