Goldman Sachs entered the third quarter of 2025 with the kind of energy it hasn’t seen since before the pandemic. The world’s most storied investment bank, often seen as a barometer for global dealmaking, not only beat Wall Street’s profit expectations but also signaled a renewed confidence in the resilience of corporate America and the broader global economy.
The bank’s third-quarter profit surged to $4.1 billion, or $12.25 per share, well above analyst forecasts of $11, according to LSEG data. The rebound was powered by a remarkable 42% jump in investment banking fees to $2.66 billion, alongside steady growth in its wealth management arm and disciplined risk management across volatile markets.
Goldman’s Chief Executive Officer, David Solomon, summed it up in a statement that struck a tone of both caution and confidence.
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“This quarter’s results reflect the strength of our client franchise and focus on executing our strategic priorities in an improved market environment,” he said. “We know that conditions can change quickly, and so we remain focused on strong risk management.”
Even so, the market’s initial response was subdued. According to Reuters, Goldman shares fell 4.7% in early trading, reflecting analyst concern that its trading segment underperformed expectations despite solid gains elsewhere. Still, the bank’s stock has surged 37% this year, buoyed by optimism that dealmaking — the lifeblood of Wall Street — is firmly back.
Dealmaking Resurgence and Billion-Dollar Mandates
At the heart of Goldman’s strong quarter was the revival of corporate dealmaking. After two sluggish years defined by high borrowing costs and inflation worries, chief executives have returned to the negotiating table. Global mergers and acquisitions volumes hit $3.43 trillion in the first nine months of the year, with nearly half originating in the United States, Dealogic data showed. That marks the most active period for M&A since 2015.
Goldman, true to form, dominated the league tables. The bank advised on more than $1 trillion in announced deals year-to-date, beating its next closest rival by $220 billion.
Among the standout transactions: Electronic Arts’ $55 billion sale to a consortium led by Saudi Arabia’s Public Investment Fund and major private equity groups; Holcim’s $26 billion spinoff of its North American business, Amrize; and Fifth Third Bancorp’s $10.9 billion acquisition of regional lender Comerica, which will form the ninth-largest U.S. bank.
Goldman’s CFO Denis Coleman confirmed that the firm’s deals backlog now sits at its highest level in three years, a clear sign that pipeline strength will carry through into 2026.
The bank also took center stage in the year’s biggest stock offerings, co-leading IPOs for design software firm Figma, Swedish fintech Klarna, and space technology company Firefly Aerospace. For a firm that built its reputation on advising blue-chip companies through complex transactions, this momentum marks a powerful return to form.
The AI Pivot: Goldman’s “OneGS 3.0” Overhaul
Beyond dealmaking, Goldman Sachs is betting heavily on artificial intelligence to redefine how it operates internally and serves clients externally.
In an internal memo titled “OneGS 3.0”, CEO David Solomon, President John Waldron, and CFO Denis Coleman outlined a plan to integrate AI across operations — from trading to compliance — while streamlining its workforce. The firm will limit hiring and conduct selective job cuts through the end of the year, focusing instead on using AI to boost productivity and reduce redundancy.
“The rapidly accelerating advancements in AI can unlock significant productivity gains for us,” the executives wrote, adding that Goldman intends to reinvest those savings into innovation and client service.
A spokesperson confirmed that despite the restructuring, the firm expects a net increase in headcount by year-end, underscoring that the AI push is about scaling smarter, not shrinking.
Asset and Wealth Management: The Stability Engine
While investment banking delivered flashier numbers, Goldman’s asset and wealth management division quietly posted one of its strongest quarters in years, with revenue up 17% to $4.4 billion.
The unit — a core part of Solomon’s strategy to create more stable, fee-based revenue — benefited from record-high management fees and strong private banking performance. Assets under supervision climbed to $3.45 trillion, up sharply as institutional clients and high-net-worth investors poured more money into Goldman’s funds and alternative investments.
Last month, the firm announced plans to acquire up to a $1 billion stake in T. Rowe Price, aiming to access its vast retirement fund ecosystem to channel more capital into private market opportunities.
By contrast, its provisions for credit losses fell slightly to $339 million, down from $397 million a year ago, mainly linked to its credit card portfolio. Goldman has been steadily exiting consumer lending after winding down its Marcus retail banking experiment.
Goldman’s trading business, historically one of its biggest profit engines, delivered mixed results in a quieter market.
Equities trading revenue rose 7% to $3.74 billion, lifted by strong financing activity but dampened by weaker returns in cash equities. Fixed income, currency, and commodities (FICC) trading performed better, climbing 17% to $3.47 billion as clients adjusted portfolios in response to shifts in U.S. trade and fiscal policies under President Donald Trump.
Traders, however, faced a new challenge: calm markets. The third quarter was one of Wall Street’s least volatile in six years, even as AI-fueled optimism and the Federal Reserve’s interest-rate cut pushed stock indexes to record highs.
For the first time in years, Goldman executives are sounding upbeat about regulation. Solomon told analysts the Basel III “endgame” — the final iteration of global capital rules — is shaping up to be far more favorable to U.S. banks than once feared.
“We’re going to see a much more constructive Basel III endgame,” he said, predicting relief in the Supplementary Leverage Ratio by next summer, alongside more transparency in the Comprehensive Capital Analysis and Review (CCAR) process.
An easier capital framework would free up billions of dollars, allowing Goldman and its peers to expand lending and buybacks without diluting capital cushions.
“The capital markets machine has clearly shifted into a higher gear,” said Stephen Biggar, a banking analyst at Argus Research. “With robust stock prices, a reduced regulatory burden, and the prospect of lower interest rates, the momentum looks sustainable.”
Goldman’s Return to Dominance
After several years of strategic rebalancing — winding down consumer banking, refocusing on institutional clients, and doubling down on asset management — Goldman Sachs appears to have found its footing again.
It has done so by returning to its roots: advising on the world’s biggest transactions, thriving in the capital markets, and positioning itself at the forefront of technology-driven change.
CEO Solomon, often criticized early in his tenure for spreading the bank too thin, now presides over an institution that has regained its Wall Street swagger — but one tempered by discipline and digital ambition.
Goldman’s third-quarter report, rich with signals of renewal, underscores the transformation. The bank has managed to capture the post-pandemic deal boom, harness AI for operational leverage, and navigate one of the most uncertain global economies in decades — all while keeping its identity intact.
For an institution once accused of losing its edge, Goldman Sachs now looks once again like the smartest bank on the Street — and one ready to prove it can dominate not only the next wave of deals but the next era of finance.