IPO Market Revival Could Boost Goldman Sachs, but Core Metrics Remain Key

What happened

A news article highlights a resurgence in the IPO market, with companies like SpaceX, OpenAI, and Anthropic preparing to go public, which is expected to benefit financial firms like Goldman Sachs. Goldman Sachs, already trading at $905 with a 16.5x P/E, has seen its stock rise 39% over the past year on expectations of a strong 2026 capital-markets upcycle. However, the latest DeepValue master report warns that the company's investment-banking fee backlog was 'essentially unchanged' in Q3 2025 and market-making revenues declined, indicating that the bullish narrative needs tangible conversion. While the IPO pipeline adds a catalyst to the AI-driven issuance tailwind, the firm's Platform Solutions segment continues to drag, with $286 million in quarterly provisions and ongoing Apple Card exit charges. Until Q1 and Q2 2026 show sequential improvement in backlog and reduced credit losses, the current valuation offers limited margin of safety.

Implication

Investors should remain cautious despite the upbeat IPO backdrop. The market already prices a strong cycle, and the critical checkpoints are 1Q26 and 2Q26 disclosures on IB backlog conversion and Platform Solutions credit costs. While high-profile IPOs could boost fees, the trend must be visible in reported results. The risk of disappointment is elevated given the crowded 'record 2026' positioning. Therefore, a WAIT stance with an attractive entry near $830 remains prudent.

Thesis delta

The IPO revival and AI-driven issuance narrative add fuel to the bullish case, but they do not alter the fundamental uncertainty around backlog conversion and platform cleanup. The thesis still requires sequential improvement in backlog and lower credit costs to justify the current multiple. Until those checkpoints are passed, the risk/reward is balanced at best.