Remember when investment bankers were basically sitting on their hands for two straight years waiting for the deal market to wake up?
Yeah, those days feel ancient now.
Suddenly every CEO on earth wants to buy (or sell) something big, and the one firm that lives and breathes mergers the way the rest of us breathe oxygen is about to have what might be its best year ever. I’m talking, of course, about Goldman Sachs.
I’ve been watching this space for longer than I care to admit, and honestly? The setup for Goldman in 2026 feels almost unfair.
The M&A Floodgates Are Finally Open
Let’s start with the obvious: deal activity is already roaring back to life.
Monday alone gave us an $11 billion tech tie-up and a hostile run at one of the biggest names in media. That’s not noise, that’s the market is screaming that the drought is over.
But here’s what really gets me excited: almost nobody is pricing in how massive 2026 could actually become.
We’ve got falling interest rates making financing cheaper. We’ve got a new administration that has openly talked about streamlining antitrust reviews. And we’ve got years, literally years, of pent-up strategic and sponsor demand that never got satisfied in 2023-2024.
All of that is like throwing gasoline on an already lit barbecue.
Why Goldman Wins When Deals Happen
Goldman isn’t just another investment bank. It’s the investment bank when it comes to big, complex, reputation-making transactions.
Think about the league tables. Year after year they fight with one or two peers for the top spot in global M&A advisory fees. When the deal pie gets bigger, their slice doesn’t just grow, it grows disproportionately because the juiciest, highest-fee mandates almost always land on their desk.
We see potential for 2026 EPS to surpass the prior high in 2021 on the back of a record year for M&A activity and significant capital flexibility to support M&A financing.
Bank of America analyst note, December 2025
That quote basically says it all. We’re not talking about some modest rebound here. We’re talking about blowing past the previous cycle peak.
The Math Is Actually Pretty Simple
Goldman’s investment-banking revenue scales almost linearly with announced deal volume once you get above a certain threshold. And we’re about to blow way past that threshold.
Rough numbers (because the analysts are being conservative):
- Every extra $1 trillion in global M&A volume tends to deliver roughly $4-5 billion of additional industry fee pool
- Goldman’s market share in the really big deals is often north of 20%
- That flows through to the bottom line at 50-60% margins once fixed costs are covered
Do that math on a $4-5 trillion M&A year (which is very much on the table for 2026) and you’re looking at investment-banking profits that haven’t been seen since… well, ever.
One major bank now thinks Goldman can clear $60 per share in 2026 earnings. For context, the stock is trading around $850 today. That would be a forward P/E of about 14x on what could be peak earnings. That’s not expensive, that’s borderline ridiculous.
It’s Not Just Advisory Fees Either
People forget Goldman has multiple ways to eat when deals happen.
- Underwriting the acquisition financing (both debt and equity)
- Arranging bridge loans
- Hedging currency or rate exposure for cross-border deals
- Providing fairness opinions
- Even helping private equity sponsors exit old investments to fund new ones
Every single one of those revenue streams explodes in a hot M&A market. And Goldman sits at the very top of most of those businesses too.
Management Is Finally Spending Again
Another thing that caught my eye: Goldman’s own acquisition spree.
After basically a decade of being in fortress-balance-sheet mode, management is suddenly willing to write real checks again. The $2 billion deal for Innovator Capital Management wasn’t tiny, and it perfectly targets the exploding active-ETF space.
That tells me two things:
- They finally feel like they have excess capital (which means the core business is throwing off serious cash again)
- They’re thinking offensively for the first time in years
When the top brass starts feeling confident enough to deploy billions, you know the underlying business is in rude health.
The Regulatory Tailwind Almost Feels Unfair
Let’s be honest about the elephant in the room: the incoming Trump administration is expected to be the most pro-deal White House in decades.
Less aggressive FTC and DOJ. Faster review timelines. Potentially even formal guidance encouraging consolidation in certain industries. All of that shortens the timeline from “we should do a deal” to “congrats, it’s done.”
Shorter timelines = more deals actually cross the finish line = fatter wallets for the advisors.
Add in the Fed’s rate-cutting cycle and suddenly every corporate treasurer in America is running spreadsheets asking “why are we still sitting on this cash when debt is this cheap?”
What Could Possibly Go Wrong?
Look, nothing goes up in a straight line. A few risks worth keeping an eye on:
- Geopolitical shocks (though even those sometimes trigger defensive M&A)
- Antitrust authorities still blocking a few marquee deals and spooking boards
- Equity markets rolling over and making stock-for-stock deals less attractive
But honestly? In twenty years of watching this stuff, I’ve rarely seen a setup with this many aligned catalysts and this few realistic roadblocks.
The Bottom Line
Goldman Sachs is about to remind everyone why it still wears the crown in investment banking.
The stock has already had a monster 2025, up more than 50%, but if the M&A cycle really takes off the way the smartest analysts think it will, we could be looking at another 30-50% upside over the next 18 months with earnings power that most investors aren’t even close to pricing in.
Or to put it more bluntly: if you’re getting paid to own what is probably about to become the single best way to play the largest M&A wave in history.
In this business, those opportunities don’t come around very often.
When they do, you don’t overthink it.
