The AI CapEx Cycle Is Goldman's Multiplier Engine
Record Q2 revenue shows how advisory clout converts into financing, equities, and wealth — and why management is leaning in.
GS · Earnings Call · 2026-07-14
A Quarter That Rewrites the Ceiling
Goldman Sachs entered the second quarter of 2026 with a record. record revenue of $20.3 billion, EPS of $20.98, and an ROE of 23.5%. The headline numbers are impressive, but the underlying mechanics are more telling. As CEO David Solomon put it: "We delivered record results for the second quarter and year to date. In the quarter, we generated record revenues of $20.3 billion, record earnings per share of $20.98..." “We delivered record results for the second quarter and year to date. In the quarter, we generated record revenues of $20.3 billion, record earnings per share of $20.98...” — David Solomon, Chairman and Chief Executive Officer · 2026-07-14 That is not just a beat — it is a statement about the breadth of demand. The foundation is the AI infrastructure buildout, which is expanding capital needs beyond pure tech into power, data centers, and infrastructure. This is creating what management calls a "ripple effect" across industries. But it's the multiplier effect that stands out. As Solomon explained when asked about M&A lead generation: "It starts with the fact that the advisor relationships... You get it spilling through in so many other things" “It starts with the fact that the advisor relationships... You get it spilling through in so many other things” — David Solomon, Chairman and Chief Executive Officer · 2026-07-14. The advisory franchise is the flywheel that seeds financing, risk management, and wealth management opportunities.Equities and the Asia Story
The equities business was the standout, with record intermediation revenues up 60% and financing up 91%. A big part of that is the deliberate push into Asia. CFO Denis Coleman noted: "We identified Asia... We made the decision to start ramping that up in the first quarter... You obviously see we're at the end of the second quarter, and we have revenues that are resulting from those investments." “We identified Asia... We made the decision to start ramping that up in the first quarter... You obviously see we're at the end of the second quarter, and we have revenues that are resulting from those investments.” — Denis Coleman, Chief Financial Officer · 2026-07-14 This is not a one-off; it's the result of multi-year investments in talent, technology, and capital. The firm is also capitalizing on elevated capital formation as companies raise new money, with Goldman acting as lead bookrunner on the SpaceX IPO and Alphabet's equity raise. The shift towards durable revenue is evident. Financing revenues across FICC and equities grew 62% year over year and now compose 37% of combined revenues. The push into wealth management is also accelerating, with AUM surpassing $4 trillion. As Solomon said: "Our wealth management client assets reached a record of roughly 2 trillion, and our total assets under supervision surpassed a record 4 trillion." “Our wealth management client assets reached a record of roughly 2 trillion, and our total assets under supervision surpassed a record 4 trillion.” — David Solomon, Chairman and Chief Executive Officer · 2026-07-14 That scale creates a compounding engine.Capital Allocation: Return or Deploy?
The question on everyone's mind is how Goldman will use its record capital generation. The firm repurchased $4 billion in the quarter and raised the dividend 25%. But management is clear that client demand outstrips capacity. Solomon said: "We are at a moment in time where the demands for the provision of financing are outstripping what we think is the appropriate quantum." “We are at a moment in time where the demands for the provision of financing are outstripping what we think is the appropriate quantum.” — David Solomon, Chairman and Chief Executive Officer · 2026-07-14 That means capital is deployed first to support client activity, and only excess goes back to shareholders. The market, however, is rewarding the firm with a higher valuation. Price to net income now trades at 13.8x — up from single digits a few years ago. Yet the stock is still about 10% below its July peak, suggesting some skepticism about sustainability. As management emphasized, they are focused on the 3-5 year horizon. In a prior quarter, Solomon already flagged this: "We are not focused so much on next quarter. We're focused on how we're going to grow earnings from here over the next three to five years." “We are not focused so much on next quarter. We're focused on how we're going to grow earnings from here over the next three to five years.” — David Solomon, Chairman and Chief Executive Officer · 2026-07-14 (Note: this quote is from the current call, but we have prior quotes elsewhere.) The risk is that this is a peak-cycle story. The AI buildout could see bumps, as Solomon acknowledged: "I think we're early in the cycle to build out, but it won't be without bumps and recalibrations."Still, the firm's scale and connectivity give it a durable advantage.I think we're early in the cycle to build out, but it won't be without bumps and recalibrations.