Goldman Sachs Reports Earnings on July 14. Can Its Investment Banking Surge Keep Going?

Goldman Sachs (NYSE: GS), one of the premier investment banks in the world, is coming off a strong first quarter, fueled by record mergers and acquisitions activity.

So what will it do for an encore?

We'll find out in a few days, as Goldman Sachs posts its second-quarter earnings results on Tuesday, July 14.

Here's what to expect.

M&A fuels blowout Q1

The first quarter was one of the best in recent years for merger and acquisition (M&A) activity, with global deal volume rising some 50% year over year to $1.6 trillion.

Goldman Sachs was a huge beneficiary of that surge in activity, ranking No. 1 in volume of deals and No. 2 in the number of deals. It facilitated five deals worth more than $10 billion, including the pending merger of Unilever and spice company McCormick.

It drove Goldman Sachs to blowout earnings in Q1 as investment banking revenue rose 48% year over year to $2.84 billion. Total revenue climbed 14% to $17.2 billion while net earnings increased 19% to $5.6 billion.

Goldman Sachs is not only the largest investment banking firm, but it also derives a larger percentage of revenue from M&A than its major competitors. So, when M&A and investment banking is hot, Goldman Sachs typically outperforms. Year to date, Goldman Sachs shares are up 20%, and they have gained 51% over the past 12 months.

What to expect in Q2

With Q2 now complete and an earnings report right around the corner, investors will be watching to see whether Goldman Sachs can maintain its momentum.

Wall Street analysts anticipated about $16.3 billion in revenue in Q2, which would be down from Q1 but up some 11% year over year. Earnings are targeted at $14.16 per share, which would be up 30% year over year.

The lower expected numbers in Q2 are not unusual, as investment banking results are typically the best in Q1 due to fresh budget allocations and other factors. On top of that, it was a historically good quarter for M&A, so it would be hard for Goldman Sachs to replicate.

But I wouldn't be shocked to see a surprise on the upside in Q2. Investment banking and M&A have remained hot in Q2, highlighted by the Space Exploration Technologies, or SpaceX, IPO, which Goldman Sachs was the lead underwriter on. Analysts said it could be one of the biggest underwriting payouts ever, generating some $100 million in fees for Goldman Sachs.

According to M&A law firm A.O. Shearman, there was $2.8 trillion in global deal volume in the first half of 2026, the most since 2021. That would be up from $2.7 trillion in the same period last year.

Deal-making was not as robust in Q2 -- the $2.8 trillion total would suggest it hit $1.2 trillion in Q2 -- but it was still strong. And the market will remain hot in the second half, particularly for Goldman Sachs, which is the co-lead advisor on the Anthropic IPO, which is expected in the second half of 2026.

That should be good news for Goldman Sachs. I'd expect another strong quarter for the investment banking firm, and its stock should move higher given its fairly low valuation of 17 times earnings.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool recommends McCormick and Unilever. The Motley Fool has a disclosure policy.