Goldman Sachs (GS -1.92%) has gone through better and worse times over its storied, 157-year history, and these are definitely better times. Among a large array of capital markets activity in the second quarter, the most prominent was its role as the lead underwriter on the Space Exploration Technologies (SpaceX) initial public offering (IPO).
Goldman Sachs stock hit a record last week, topping $1,150, and there's still momentum building as the investment bank services its long backlog of client demand. But is there anything left for new investors?
Driven by a strong bull market
Goldman Sachs is the largest investment bank in the world, and it thrives in strong bull markets. The S&P 500 hit new highs in the second quarter, during which it gained 14.6%, and that drives business for investment banks. CEO David Solomon noted that the artificial intelligence (AI) cycle is creating large capital markets needs, and clients are coming to Goldman Sachs for services like financing and risk management.
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The bank has several divisions, and there's a flywheel effect as financing advice turns into capital raises and capital raises in turn become opportunities for the wealth management division. Altogether, it's a wheel that keeps turning and reaping results in all sorts of ways.
This led to record performance in the second quarter, including record revenue of $20.3 billion, record fees, record assets under management of more than $4 trillion, and record earnings per share of $20.98. Global banking and markets revenue increased 53% year over year, driven by a 55% increase in investing banking fees, while total revenue was up 39%.
Not just SpaceX
While the SpaceX IPO was certainly an important part of the second-quarter blowout, there were several other prominent pieces. It also structured a secondary offering for Alphabet, advised NextEra Energy's acquisition of Dominion Energy, and advised Comcast's spinoff of NBCUniversal. Solomon noted a "significant" increase in corporate dealmaking, and large-cap corporate mergers and acquisitions volume increased 90% year over year through the first half of 2026, while its backlog is the highest in five years and the second-highest ever.
NYSE: GS
Key Data Points
The question is what comes next. While Solomon pointed out that it's clear that these are the early innings in the AI buildout, history shows that high IPO activity often comes at the end of a bull cycle. Goldman Sachs stock trades at just under 17 times trailing-12-month earnings, which is a premium to recent averages. This might be the peak of the deal-making cycle, and investors should consider that, as well as Goldman Sachs is performing, this might not be the optimal time to buy the stock.
