Here’s how Goldman Sachs got its swagger back

Goldman Sachs’ CEO David Solomon is back on the attack as the storied bank gets ready for a big year. Jeenah Moon/Bloomberg via Getty Images

• Goldman Sachs posted strong fourth-quarter earnings as dealmaking surged.
• The firm’s stock price is up more than 60% over the past year, far outpacing major rivals.
• CEO David Solomon says dealmaking levels may soon rival — or exceed — the heyday of 2021.

Goldman Sachs is acting like Goldman Sachs again. The Wall Street giant is coming off one of its best years on record, its share price is through the roof, and its executives are downright giddy over its swelling deal pipeline. Equity trading is booming, and dealmaking is thriving ahead of what could be one of the biggest years for IPOs of all time, big boons for Goldman’s bottom line. If the bank had lost its luster, CEO David Solomon seems to have gotten it back. Goldman is once again Wall Street’s top dog. It’s a swift comeback for a firm that some declared dead as recently as 2023. The scars of an internal PR crisis and concerns over Solomon’s DJ side hustle are long in the past. Goldman is on the attack again as it readies for a monster year. “I think the world is set up at the moment to be incredibly constructive in 2026 for M&A and capital markets activity,” Solomon told an analyst during the firm’s fourth-quarter earnings call on Thursday. “The 2021 levels will be exceeded again. They might be exceeded in 2026.” Being on the right footing is all the more important as other banks are jockeying for some of the industry’s hottest deals too. In a memo to her staff on Wednesday, Citi CEO Jane Fraser warned her staff against settling for second best. “The animal spirits have been unleashed,” veteran Wells Fargo bank analyst Mike Mayo told Business Insider last week, noting competition among the banks is now “at its most intense level since before the global financial crisis.” Here’s how Goldman got its swagger back and what’s still at stake.

Inside the strategy

Much of Solomon’s vision that’s playing out today dates back to a 2020 investor day just a few weeks before the coronavirus pandemic sent the world into a tailspin. At the presentation — which featured a number of then-Goldman officials who are no longer at the bank — its leaders teased two pursuits that would go on to shape its future: “digitization” and “consumerization.” Not everything went according to plan. Its consumer banking venture, Marcus, proved a costly distraction that fomented schisms among power brokers and sent some partners to the exits. Stephanie Cohen, the bank’s former chief strategy officer and an architect of its consumer strategy, left the firm in 2024 to go to the tech sector. The bank retreated from many of its consumer ambitions due to ballooning spending, but the Marcus brand lives on as a deposits platform within its combined asset and wealth management business. Marcus holds more than $100 billion in consumer deposits in the US and UK, contributing to more than $500 billion in deposits overall, the bank has said. The bank also got closure on another Marcus venture this week. It has relinquished its Apple Card partnership to JPMorgan. A silver lining for the bank is that this transfer meant analysts didn’t pepper Solomon with questions about President Donald Trump’s 10% credit card interest proposal. Other CEOs had to address it point-blank during their earnings calls. Aside from the consumer flop, other initiatives stuck. Solomon merged the asset and wealth businesses in late 2022. The gambit appears to have paid off — the business’ assets under supervision climbed nearly half a trillion dollars to $3.6 trillion last year, an all-time high, alongside investments in private banking, alternatives, and wealth management in the high-net-worth category. About a year ago, Goldman formalized its Capital Solutions Group, coalescing its advisory, financing, structuring, and risk-management capabilities. The unit’s primary objective is helping corporate clients navigate increasingly bespoke capital needs at a time when liquidity demands are skyrocketing.

Goldman’s era of turbulence

The consumer banking misfire fueled multiple years of unrest from 2022 to 2024. At times, the infighting spilled into public view, with some frustrated partners turning to reporters to get the CEO’s attention. Some who worked directly with Solomon bristled over a management style they said could be abrasive and alienating; he, in turn, told veteran journalist Bethany McLean that internal leaks were “damaging the firm.” Those familiar with Goldman’s closely guarded mystique were surprised at the spillover at the time, saying it conflicted with the bank’s pristine image. Tensions resurfaced almost two years ago, when questions about the advancement of women at Goldman were thrust to the center stage following a critical Wall Street Journal report. Business Insider later revealed talking points the firm circulated to managers to quell concerns from within its own walls, acknowledging that the issue had become a flashpoint. Even so, Solomon and his deputy, President and COO John Waldron, kept moving — and the bank continues to draw hopefuls at scale. More than a million people applied for jobs at the bank last year, Solomon said, and its ultra-exclusive internship acceptance was less than 1%.

The future: One GS 3.0 and AI

With the business stabilized, Goldman is focused on its next chapter, and chatter surrounding Solomon has died down. Last year, the bank awarded both Solomon and Waldron $80 million in restricted stock units to vest over five years, signaling it doesn’t want the duo going anywhere. Last year, it acquired the ETF platform, Innovator; the VC firm Industry Ventures; and partnered with T. Rowe Price. In the fall, the firm rolled out One Goldman Sachs 3.0, an AI-driven overhaul of an internal operating model designed to unify business lines, cross-sell products, and foster company cohesion. It’s pouring billions into the development of technology — Solomon has said he wishes his $6 billion tech budget was higher — and deployment of artificial intelligence to supercharge the bank’s workers and cut costs. But the road ahead is never certain. Goldman has stumbled on high-profile tech initiatives before, and executives have acknowledged that changing how a 150-year-old institution works is neither quick nor easy. Pressed by Mayo for more specifics on what Goldman’s AI investments will entail, Solomon sought to reassure listeners that the firm is taking a measured approach. “This is not a new era for Goldman Sachs,” he said. Goldman, he added, remains focused on its two core businesses — its global banking and markets franchise, and its asset and wealth management unit — with AI serving as an accelerant. “It’s not just to take cost out,” Solomon said. “It’s to free up capacity to invest in other areas where we see growth opportunities that we’ve been a little bit constrained.” After the ups and downs of the first half of the decade, Solomon is poised to enter the second half with the wind at his back and his hands held tightly to one of Wall Street’s most feared and coveted thrones. Partners, shareholders, journalists, and rivals will be watching closely to see where he steers Goldman next.