GS: Wall Street's Selloff Creates a Rare Entry Point

Goldman's 2025 was a powerhouse year. Quarterly EPS came in at $14.12 (Q1), $10.95 (Q2), $12.25 (Q3), and $14.00 (Q4), delivering full-year diluted EPS of $51.32. Revenue ranged from $30.1 billion to $32.2 billion per quarter, totalling approximately $125 billion for the year.

Q4 2025 revenue of $30.1 billion included gross profit of $15.6 billion — a gross margin of 51.7%. Operating income reached $5.9 billion with a 19.4% operating margin. Net income of $4.6 billion represented a 15.3% net margin, with an effective tax rate of 21.1%.

The key trend: Goldman's revenue base has structurally expanded. This is no longer a firm that swings wildly between $20 billion and $40 billion in annual revenue. The combination of a resurgent investment banking franchise and a maturing asset management business has created more predictable earnings.

The investment banking pipeline remains Goldman's most compelling growth driver. Global M&A volumes hit $5.1 trillion in 2025, and the backlog heading into 2026 is substantial. Goldman's advisory and underwriting franchises are the best in the business, and deal activity tends to accelerate when volatility settles — meaning the current pullback may be creating pent-up demand.

Goldman's AI initiatives and private-market expansion represent longer-term growth vectors. The firm is aggressively building its alternatives platform, competing with the likes of Blackstone and KKR for institutional capital. However, recent Benzinga reporting noted that some Goldman clients are "glad" the Iran conflict has shifted attention away from software exposure and private credit concerns — a candid admission that parts of the book face headwinds.

Analyst estimates project continued revenue growth, with forward estimates averaging $17-18 billion per quarter on a reported basis. The market is pricing in near-zero growth, which creates asymmetric upside if deal activity meets even modest expectations.

Goldman reports Q1 2026 earnings on April 13, making this a catalyst-rich setup. The street will be watching for three things: investment banking revenue (has the M&A pipeline converted?), trading revenue (has volatility helped or hurt?), and commentary on credit quality in the alternatives book.

The Iran conflict creates a paradoxical backdrop. Elevated geopolitical volatility typically boosts trading revenue — Goldman's FICC and equities desks tend to outperform in choppy markets. At the same time, it suppresses deal activity and dampens risk sentiment that supports asset management flows.

The consensus appears to be that Goldman's 53.5% rally in 2025 was overdone and the stock needs to consolidate. But at 15x earnings with a clear catalyst on the horizon, the risk-reward skews bullish from current levels. This is not a stock that should trade below book value unless you expect a recession — and the data doesn't support that conclusion yet.