Goldman Sachs Group (GS) says merger activity could stay strong into 2026, even as global risks remain in focus. The bank expects the so-called “pure M&A” volume to reach about $3.8 trillion, surpassing prior peak years.
Claim 55% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
According to Tim Ingrassia, Co-Chairman of Global Mergers and Acquisitions, the current cycle is still in its middle stage. He notes that most M&A cycles last six to seven years, and the market is now in year four. As he put it, “it’s really, really hard to interrupt the momentum of the cycle.”
At the same time, recent data shows that large deals are already on the rise. Deals worth more than $10 billion jumped 24% above the prior peak seen in 2021. This trend often points to broader activity ahead, since large firms tend to move first and set the pace for the rest of the market.
Meanwhile, GS shares dropped 0.47% on Friday, closing at $926.91.
AI and Private Equity Are Key Drivers
Looking ahead, two main forces are shaping this cycle. First, AI is pushing firms to think more about long-term value. Ingrassia calls this shift the “tyranny of terminal value,” where firms focus on what a business may be worth years from now rather than current results.
As a result, many firms are using deals to improve their future position. Ingrassia explains that buyers “have to buy terminal value,” since they cannot rely only on steady growth to stay competitive. This trend is leading more firms to consider deals as part of their long-term plans.
Second, private equity firms are under pressure to sell assets. Returns to investors have slowed, and many funds need to exit older holdings. Ingrassia says this clearly, noting that “they need to sell,” and adding that M&A “depends more on supply than demand.”
Meanwhile, even though global risks remain high, deal activity has not slowed much. Ingrassia notes that “we’ve gotten used to uncertainty,” which suggests that firms are more willing to move ahead with deals despite market swings.
Taken together, these trends point to a steady flow of deals, with large transactions likely to lead the way and smaller deals expected to follow.
Is Goldman Sachs Stock a Good Buy?
Turning to the Street, Goldman Sachs has a Moderate Buy consensus. Of 12 analysts’ ratings, six rate it a Buy, five rate it a Hold, and one analyst rates it a Sell. The average GS stock price target is $974.92, which implies a 5.18% upside from the current price.
