Goldman Sachs (GS) CEO David Solomon undertook a difficult balancing act this morning, saying the outlook for dealmaking this year remains promising despite ongoing concerns.
“2026 began with a degree of optimism with markets at record highs,” Solomon told analysts Monday morning, but added that “things rarely move in a straight line.”
Solomon kicked off what could be a tricky earnings season for Wall Street CEOs. And Goldman Sachs’s results on Monday highlight the dynamic.
The bank reported its second-highest quarterly profit ever. Yet, following the release at market open, Goldman Sachs stock erased a more than 3% gain for 2026.
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Solomon ticked through the well-known worries across markets, including heightened uncertainty in private credit, the war in Iran, and ongoing concerns around AI disruption to software players.
However, he maintained that “the environment for investment banking activity continues to be incredibly robust, particularly, m&a activity.”
“Unless the overall environment got much, much worse, I don’t see that slowing, based on what we see at the moment,” Solomon said. But he noted that conflict in the Middle East has dampened IPO and sponsor activities.
“Broadly, we believe that activity levels will rebound once conditions stabilize,” Solomon added.
Wall Street dealmakers saw a lot of opportunities on the horizon at the beginning of the year as big corporations capitalize on the Trump administration’s deregulatory push. Private equity firms also need to realize their portfolio investments. And a number of big companies, including SpaceX (SPAX.PVT), Anthropic (ANTH.PVT), and OpenAI (OPAI.PVT), plan to go public later this year.
Goldman Sachs beat analyst expectations across its three main dealmaking businesses, bringing in over $900 million more revenue in the quarter, driven by an 89% jump in M&A advisory fees. It also notched a new record haul in stock trading fees.
On the other hand, its FICC trading business fell 10% for the same period, driven by “significantly lower net revenues in interest rate products, mortgages and credit products,” according to the company’s press release.
Goldman Sachs also set aside $315 million in provisions for credit losses during the quarter, a 10% increase from $287 million in the first quarter of last year.
Provisions in last year’s figure came mostly from the bank’s credit card portfolio. This quarter, Goldman Sachs said its higher credit loss provisions “primarily reflected growth and impairments related to wholesale loans.” Soloman added that those provisions were not related to the company’s private credit or FICC financing business.