GS Navigates 2025 With Strong Earnings and Stress Test Resilience

For The Goldman Sachs Group, Inc. GS, 2025 has been characterized by both strategic gains and persistent challenges. The investment banking giant, which is part of the Zacks Financial - Investment Bankindustry, has managed to navigate a complex macroeconomic landscape with notable resilience amid pressure from a shifting market environment. Its stock has shown moderate gains year to date, reflecting a cautious optimism among investors.

One of the major positives for Goldman Sachs this year has been the rebound in dealmaking activity. After a sluggish 2023 and a tentative 2024, mergers and acquisitions have started to pick up pace in 2025, aided by improving corporate confidence and a recalibration of interest rate expectations. The firm has seen an uptick in advisory services and equity underwriting revenues. Asset and wealth management have also remained bright spots, with assets under supervision continuing to grow, largely driven by inflows into alternative investments.

In mid-April, Goldman Sachs came out with first-quarter earnings of $14.12 per share, beating the Zacks Consensus Estimate of $12.71. This compares to earnings of $11.58 per share a year ago. The company also posted revenues of $15.06 billion for the quarter, surpassing the Zacks Consensus Estimate of $15.02 billion, or by 0.27%. This compares to year-ago revenues of $14.21 billion. The company topped revenue estimates in each of the last four quarters.

However, not all areas have performed equally well. The firm’s trading division has seen volatility. While fixed income revenues held steady thanks to increased hedging activity from clients, equities trading faced headwinds from low market volumes. Additionally, the consumer banking retreat that began in 2023 has continued to weigh on sentiment.

In June 2025, the Fed released the results of its annual Supervisory Capital Assessment, and Goldman Sachs emerged as one of the standout performers among the 22 large U.S. banks. Under the “severely adverse” macroeconomic scenario that featured a 10% unemployment rate, a 33% drop in home prices, a 50% stock market decline and a contraction in commercial real estate, Goldman was projected to lose only around $300 million. This starkly contrasted with its estimated $18 billion projected loss in the 2024 stress test cycle.

GS currently carries a Zacks Rank #3 (Hold). Year to date, GS has grown 25% compared with a 15.9% advance for its Zacks Peer Group. Citigroup Inc. C and Wells Fargo & Company WFC are noteworthy competitors in the same space. Citigroup and Wells Fargo have grown 23.3% and 17.3% in the same period, respectively, and also carry a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bottom Line

The outlook for GS hinges heavily on the broader economy and financial markets. If interest rates stabilize, Goldman Sachs could benefit significantly. However, if macro headwinds persist or market volatility spikes, the firm might again come under pressure. For investors seeking exposure to a well-capitalized, globally entrenched financial powerhouse with upside potential amid economic recovery, Goldman Sachs presents itself as a worthy, albeit not risk-free, proposition.

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This article originally published on Zacks Investment Research (zacks.com).

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