Goldman Sachs (GS) just sent Wall Street a clear message: we’re done experimenting with consumer banking, and we’re doubling down on what we do best.

The investment banking powerhouse also announced a whopping 50% dividend increase, raising its quarterly payout to $4.50 per share from $3 just a year ago. 

That’s a bold move for any bank, but especially striking given that Goldman simultaneously reported selling off its troubled Apple Card business to JPMorgan Chase.

The aggressive dividend hike signals something important: management believes the worst is behind them, and the next few years could be exceptionally strong.

Goldman Sachs is bullish on long-term growth

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Goldman makes clean break from consumer banking

Goldman’s decision to offload the Apple Card marks the final chapter in what CEO David Solomon has called a “strategic mistake” – the firm’s brief and costly detour into consumer banking.

The bank struck a deal with JPMorgan to take over the Apple Card portfolio, a move that actually boosted Goldman’s fourth-quarter earnings by $0.46 per share.

The bank released $2.48 billion from loan-loss reserves tied to the credit card business, providing an immediate financial boost.

Related: JPMorgan Chase to take over embattled Apple Card program, Apple Savings after Goldman Sachs retreat

It’s a strange twist: Goldman is getting paid to exit a business that lost money for years.

The Apple Card saga started in 2019 when Goldman partnered with Apple to launch a flashy titanium credit card aimed at everyday consumers. 

The pitch was simple: Goldman would bring its financial expertise to millions of iPhone users, opening a massive new revenue stream.

It didn’t work out that way.

  • The card business racked up losses quarter after quarter as Goldman struggled with the nuts and bolts of consumer lending: fraud prevention, customer service, and retail banking regulatory compliance. 
  • These are problems the firm had never faced in its century-plus history of serving corporations and ultra-wealthy clients.

Now that the Apple Card exit is nearly complete, Goldman can focus entirely on its two core businesses: Global Banking & Markets and Asset & Wealth Management.

Trading desks deliver a monster Q4

While Goldman was cleaning house in consumer banking, its traditional Wall Street businesses were printing money.

Equities trading revenue jumped 25% year-over-year to $4.31 billion, crushing analyst expectations by about $610 million. That’s serious outperformance in a business where beating estimates by even 5% is considered a win.

The strength came from two areas: derivatives trading and equity financing. 

  • Hedge funds and institutional investors kept Goldman’s traders busy, hedging positions and financing stock purchases. 
  • In equity financing alone, Goldman posted a quarterly record of $2.1 billion in revenue.
  • Fixed income trading also delivered, climbing 12% to $3.11 billion, about $180 million ahead of expectations. Strength in interest rate products and commodities drove the gains.

That’s the kind of performance that makes the consumer banking losses look like a rounding error.

Investment banking backlog signals strong 2026

Goldman maintained its crown as the number one M&A adviser for the 23rd consecutive year, advising on over $1.6 trillion in announced deals in 2025.

Even more encouraging: the bank’s backlog of pending deals reached its highest level in four years, driven primarily by merger advisory work. That sets up 2026 for potentially massive fee revenue as those deals close.

Investment banking fees surged 25% in the fourth quarter to $2.58 billion, right in line with expectations. The gains came from merger advisory work and debt underwriting as companies took advantage of still-favorable market conditions to raise capital and pursue acquisitions.

Wealth management continues steady march

Goldman’s Asset & Wealth Management business brought in $4.72 billion in revenue, exceeding expectations by about $270 million, despite being roughly flat year over year.

Management fees hit a record $3.1 billion in the quarter, up 10% year over year, as Goldman’s growing base of ultra-wealthy clients and institutional investors continued to add to their accounts.

CEO David Solomon stated:

The wealth business also benefits from Goldman’s leading alternatives platform, which raised $115 billion in new capital during 2025. That was a record year for fundraising, and those fees are just starting to flow through as that capital gets deployed.

Goldman is bullish on dividend growth

The 50% dividend increase isn’t just about returning capital to shareholders. It’s management putting a stake in the ground about where they think the business is headed.

Goldman now expects to exceed its medium-term return targets driven by three factors: a capital markets rebound, industry deregulation under the new administration, and the shedding of capital-intensive consumer banking operations.

The regulatory environment has shifted dramatically. Goldman’s stress capital buffer has fallen by 320 basis points over the past few years, freeing up billions in excess capital. 

The bank ended the quarter with a common equity Tier 1 ratio of 14.4%, well above regulatory minimums.

That excess capital gives Goldman options: invest in high-return businesses, pursue strategic acquisitions, or return more money to shareholders through buybacks and dividends. 

Solomon explained, “We prioritize investing across our client franchises at attractive returns, sustainably growing our dividend and returning excess capital to shareholders in the form of buybacks.”

The bank returned $4.24 billion to shareholders in the fourth quarter alone through $3 billion in stock repurchases and $1.2 billion in dividends.

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According to data from Tikr.com, Goldman Sachs is forecast to increase the annual dividend per share from $18.4 in 2025 to over $31 in 2030. It means the effective yield at cost could widen from 1.9% to 3.2%. 

The risks investors should watch for GS stock

Goldman’s optimistic outlook isn’t without risks:

  • The bank’s non-compensation expenses rose 9% for the full year, driven by higher technology investments and transaction-related costs.
  • The firm is making big bets on AI through its “One Goldman Sachs 3.0” initiative, reimagining six core business processes with artificial intelligence. 
  • While that could drive efficiency gains, it requires significant upfront investment with payoffs that might take years to materialize.

There’s also the macroeconomic wildcard. Goldman’s business model thrives when markets are active and volatile, but a severe downturn could quickly reverse the positive momentum. 

Higher interest rates, geopolitical shocks, or a recession could slam the brakes on M&A activity and trading volumes.

The bottom line takeaway on Goldman Sachs

Goldman Sachs is making a clear statement: the consumer banking experiment is over, and the firm is all-in on investment banking and wealth management.

The 50% dividend increase shows management’s confidence that the strong performance in trading and investment banking isn’t just a one-quarter fluke. 

With a record deal backlog, strong trading momentum, and growing wealth management revenues, Goldman has multiple engines firing.

For investors, the question is whether the stock price already reflects this rosy outlook. At current valuations, Goldman needs to deliver on its ambitious targets to justify the premium. 

But if the investment banking cycle continues heating up as management expects, there could be room for both strong earnings growth and continued dividend increases ahead.

Related: Goldman Sachs drops a curveball on interest-rate cuts