The MoatWide moat

Goldman Sachs (GS) — moat facet

Goldman's moat is its place with the biggest clients in finance, which protects its share but not its revenue from a quiet market.

Goldman's moat is its position with the largest clients in finance. It has led advisory by revenue share for 23 years1, ranks in the top three with 123 of the top 150 trading clients2, and supervises $4.04 trillion of assets3. Those positions are hard to copy because each depends on the others: advice brings the financing mandate, financing brings the trading flow, and the trading desks distribute the deals.

Pre-tax earnings by segment, 2025 ($M)Global Banking & Markets — 80%Asset & Wealth Management — 19%Platform Solutions — 1%Goldman Sachs Form 10-K FY2025, restated segment basis
The trading and banking segment earns four-fifths of the profit.

For a bank the test of a moat is the return on tangible equity. Goldman's was 16.0% in 20254, against an assumed 10% cost of equity, the hurdle this app uses for JPMorgan, Bank of America and Morgan Stanley. It was 25.5% in the second quarter of 20265. The firm's own target is 15% to 17% through the cycle6.

The record is less steady than the franchise. Return on tangible equity was 5.2% in 2017, 24.3% in 2021 and 8.1% in 2023789. Part of that volatility was self-inflicted: Platform Solutions, the consumer business, lost about $7.1 billion before tax from 2020 to 202410, and it is being wound down with the Apple Card transition.

The segments show where the moat is. Global Banking & Markets earned a 16.4% return on equity in 2025, Asset & Wealth Management 12.5% and Platform Solutions 2.1%11. The first earns well above its cost of capital; the second is getting there; the third is leaving.

The firm's own presentation puts the change since its first investor day in four numbers. Earnings per share went from $21.03 in 2019 to $51.32 in 2025, return on equity from 10.0% to 15.0%, and book value per share from $218.52 to $357.6012. It reports total shareholder return of 341% since 201913. The return on equity is the one that measures the moat; the others follow from it and from the buybacks.

The verdict is a wide moat around a cyclical business. Clients, reputation and scale protect Goldman's share; they do not protect its revenue from a quiet market. What would change the verdict is return on tangible equity through the next weak year: above 12% would show the franchise now earns its cost of capital even when markets do not help, and below 10% would show it does not.

Moat trajectory: Widening

ROTE 8.1% (2023) to 16.0% (2025) to 25.5% (Q2 2026).

The number that tests this moat
Reported
ROTE vs cost of equity
16.0% (2025) vs ~10% hurdle; 25.5% latest quarter (Q2 2026)

The return the firm earns over its cost of equity; a year back below 12% would mean the franchise does not earn its keep in a quiet market.

For a bank, return on tangible equity replaces ROIC; the 10% cost of equity is an assumption, the same used for JPMorgan, Bank of America and Morgan Stanley.
Source: Goldman Sachs Form 10-K, FY2025 ↗
Aspects of the moat
DIG DEEPER 01
The Markets Franchise
Goldman's trading floor is a dealer franchise with a rent roll attached, and the rent roll is growing faster than the trading.
DIG DEEPER 02
The Advisory Franchise
Goldman's name in the boardroom is its oldest asset, and it now brings the loan and the bond issue along with the advice.
DIG DEEPER 03
The Asset Gatherer
Goldman built a four-trillion-dollar fee business to steady its trading profits, and it is only now starting to earn good returns.
DIG DEEPER 04
The Balance Sheet and What It Earns
Goldman's balance sheet now funds itself like a bank and returns capital like a partnership, but the regulator still sets the pace.
References
  1. ReportedIt has led advisory by revenue share for 23 years, ranks in the top three with 123 of the top 150 trading clients, and supervises $4.04 trillion of assets.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - league tables, wallet share and client rankings. — FY2025 · publ. 15 January 2026 · source ↗
  2. ReportedIt has led advisory by revenue share for 23 years, ranks in the top three with 123 of the top 150 trading clients, and supervises $4.04 trillion of assets.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - league tables, wallet share and client rankings. — FY2025 · publ. 15 January 2026 · source ↗
  3. ReportedIt has led advisory by revenue share for 23 years, ranks in the top three with 123 of the top 150 trading clients, and supervises $4.04 trillion of assets.
    Goldman Sachs second-quarter 2026 earnings presentation, Form 8-K exhibit 99.2 - ROE, ROTE, efficiency ratio, Dealogic rankings, AUS by channel, alternatives fundraising and wealth figures. — Q2 2026 · publ. 14 July 2026 · source ↗
  4. ReportedGoldman's was 16.0% in 2025, against an assumed 10% cost of equity, the hurdle this app uses for JPMorgan, Bank of America and Morgan Stanley.
    Goldman Sachs Form 10-K for fiscal 2025 - financial targets, capital, returns, funding and capital returned. — FY2025 · publ. 25 February 2026 · source ↗
  5. ReportedIt was 25.5% in the second quarter of 2026.
    Goldman Sachs second-quarter 2026 earnings presentation, Form 8-K exhibit 99.2 - ROE, ROTE, efficiency ratio, Dealogic rankings, AUS by channel, alternatives fundraising and wealth figures. — Q2 2026 · publ. 14 July 2026 · source ↗
  6. ReportedThe firm's own target is 15% to 17% through the cycle.
    Goldman Sachs Form 10-K for fiscal 2025 - financial targets, capital, returns, funding and capital returned. — FY2025 · publ. 25 February 2026 · source ↗
  7. ReportedReturn on tangible equity was 5.2% in 2017, 24.3% in 2021 and 8.1% in 2023.
    Goldman Sachs Form 10-K for fiscal 2019 - ROE and ROTE for 2017-2019 and net revenues and net earnings for 2019. — FY2019 · publ. February 2020 · source ↗
  8. ReportedReturn on tangible equity was 5.2% in 2017, 24.3% in 2021 and 8.1% in 2023.
    Goldman Sachs Form 10-K for fiscal 2022 - net revenues, net earnings, ROE and ROTE for 2020-2022, segment results on the basis then used, and the GreenSky and NNIP acquisitions. — FY2022 · publ. February 2023 · source ↗
  9. ReportedReturn on tangible equity was 5.2% in 2017, 24.3% in 2021 and 8.1% in 2023.
    Goldman Sachs Form 10-K for fiscal 2025 - financial targets, capital, returns, funding and capital returned. — FY2025 · publ. 25 February 2026 · source ↗
  10. Moat Explorer calcPart of that volatility was self-inflicted: Platform Solutions, the consumer business, lost about $7.1 billion before tax from 2020 to 2024, and it is being wound down with the Apple Card transition.
    Moat Explorer calculation from Goldman Sachs' reported figures ($ millions unless stated; calendar years). Growth: net revenues 2025 58,283 / 53,512 - 1 = 8.9%, about 9%; 2022 47,365 / 59,339 - 1 = -20.2%; net earnings 2022 11,261 / 21,635 - 1 = -47.9%, nearly half; pre-tax earnings 21,852 / 10,739 = 2.03 times, about double; compensation 18,906 / 16,706 - 1 = 13.2%; total operating expenses 37,544 / 33,767 - 1 = 11.2%; preferred dividends 876 / 751 - 1 = 16.6%; CEO pay 47 / 39 - 1 = 20.5%; equities 16,535 / 11,549 - 1 = 43.2%; FICC 14,522 / 12,150 - 1 = 19.5%; FICC intermediation 10,271 / 9,318 - 1 = 10.2%; FICC financing 4,251 / 2,832 - 1 = 50.1%; Global Banking & Markets 41,453 / 29,994 - 1 = 38.2%; GBM pre-tax 17,574 / 11,000 - 1 = 59.8%; advisory 4,726 / 3,299 - 1 = 43.3%; underwriting (1,784 + 2,829) / (1,153 + 1,763) = 4,613 / 2,916 - 1 = 58.2%; investment banking fees 9,339 / 6,215 - 1 = 50.3%; 9,339 - 6,215 = 3,124, about $3.1 billion; Q2 2026 pace 3,395 x 4 = 13,580, 13,580 / 9,339 = 1.45; financing 11.45 / 6.03 = 1.90, close to double; intermediation best/worst 19.6 / 15.8 = 1.24; equity underwriting Q2 985 / 428 - 1 = 130%; H1 2026 equities 12,742 / 8,493 - 1 = 50%. Assets under supervision: 4,041 / 3,606 - 1 = 12.1% (six months); 3,606 / 3,137 - 1 = 15.0%; Q2 2026 rise 4,041 - 3,650 = 391 = inflows 230 + appreciation 161; management and other fees 11,538 / 10,415 - 1 = 10.8%; historical principal investments 9.4 - 6.0 = 3.4 billion; alternatives target 750 - 459 = 291 billion, 291 / 4.5 = 64.7, about 65 a year; 291 x 0.58% = 1.69 billion, about 1.7 billion; Shell mandate 40 / 4,041 = 1.0%; AWM ROE 12.5 + 2.3 = 14.8, near 15%. Shares of revenue: GBM 15,520 / 20,338 = 76.3% (Q2 2026), 41,453 / 58,283 = 71.1% (2025), 29,994 / 46,254 = 64.8% (2023); AWM 16,679 / 58,283 = 28.6% (2025), 16,316 / 53,512 = 30.5% (2024), 14,202 / 46,254 = 30.7% (2023), 4,597 / 20,338 = 22.6% (Q2 2026); equities 7,416 / 15,520 = 47.8% of the segment in Q2 2026; advisory 4,726 / 58,283 = 8.1%; GBM pre-tax 17,574 / 21,852 = 80.4%; FICC plus equities 14,522 + 16,535 = 31,057; Q2 2026 financing 1,216 + 3,259 = 4,475; durable revenues 26.3 / 58.283 = 45.1% (2025), 12.2 / 36.546 = 33.4% (2019); GBM assets 1,582,670 / 1,809,320 = 87.5%; brokered and sweep deposits (47 + 34) / 501 = 16.2%; compensation 18,906 / 37,544 = 50.4% of operating expenses; preferred dividends 876 / 17,176 = 5.1% of net earnings; financing against alternatives fees 11.45 / 2.37 = 4.8, about five times. Margins: GBM pre-tax margin 17,574 / 41,453 = 42.4% (2025), 11,000 / 29,994 = 36.7% (2023); AWM 4,127 / 16,679 = 24.7% (2025), 4,865 / 16,316 = 29.8% (2024), 1,763 / 14,202 = 12.4% (2023). Balance sheet and capital: total assets 2,128 / 1,675.972 - 1 = 27.0% (end-2024 to June 2026); equity 121,996 to about 123,000, almost unchanged; deposits 558 / 433 - 1 = 28.9%, about 29%; loans to deposits 261 / 558 = 46.8%, about 47%; JPMorgan deposits 2,559,320 / 501,000 = 5.1 times; CET1 headroom 12.9 - 11.4 = 1.5 points, about 150 basis points; a repeat of the first-half fall 12.9 - (14.3 - 12.9) = 11.5%; basic shares 298.4 / 322.9 - 1 = -7.6%, about 8% fewer; TBVPS 335.49 / 316.02 - 1 = 6.2%; buyback price 935.45 / 984.57 - 1 = -5.0%; first-half ROE 21.7 - 1.7 = 20.0%; Platform Solutions pre-tax losses 783 + 1,047 + 1,989 + 2,175 + 1,075 = 7,069, about $7.1 billion. Valuation: trailing twelve months to June 2026 net revenues 58,283 - 29,645 + 37,565 = 66,203; net earnings 17,176 - 8,461 + 12,258 = 20,973; diluted EPS 51.32 - 25.07 + 38.51 = 64.76; P/E 283,220 / 20,973 = 13.5; P/S 283,220 / 66,203 = 4.28; year-end P/E 263.64 / 17.176 = 15.35 (2025), 179.75 / 14.276 = 12.59 (2024), 125.80 / 8.516 = 14.77 (2023), 128.08 / 21.635 = 5.92 (2021); 52-week high 935.45 / 1,153.99 - 1 = -18.9%, about 19% below; Morgan Stanley gap 308.32 - 283.22 = 25.1 billion; market value on basic shares 298.4 x 935.45 = 279.1 billion. Further: Platform Solutions provisions against revenue (old basis) 1,728 / 1,502 = 115% (2022), 1,135 / 2,378 = 47.7%, about 48% (2023), 1,540 / 2,427 = 63.5%, about 63% (2024); 2021 to 2022 revenue fall 59,339 - 47,365 = 11,974, about $12 billion; Q2 2026 equities less Q1 7,416 - 5,326 = 2,090; AWM revenue 2025 16,679 / 16,316 - 1 = 2.2%; liquidity products 1,065 / 4,041 = 26.4%, about a quarter; AUS year on year 4,041 / 3,293 - 1 = 22.7%, about 23%; alternatives 459 / 2,976 = 15.4% of long-term AUS; private banking and lending H1 2026 638 + 689 = 1,327, x 2 = 2,654, near $2.7 billion; VaR factors before diversification 82 + 65 + 19 + 30 = 196; GBM Q1 2026 12,738 / 17,227 = 73.9%, about 74%; transaction banking and private bank deposits (70 + 101) / 501 = 34.1%, about a third; GBM assets share 87.5%, nearly nine-tenths; EMEA 2025 14,155 / 12,250 - 1 = 15.6%, about 16%; unsecured long-term borrowings 285,500 / 242,634 - 1 = 17.7%, about 18%; JPMorgan deposits 2,559,320 / 2,406,032 - 1 = 6.4%; Goldman deposits 501 / 433 - 1 = 15.7%, about 16%; H1 2026 financing 2,278 + 5,867 = 8,145; Q2 2026 compensation 6,104 / 4,685 - 1 = 30.3%; diluted shares 321.4 / 306.5 - 1 = 4.9%, about 5%; advisory 2025 4,726 / 3,534 - 1 = 33.7%, about 34%; underwriting 2025 (1,784 + 2,829) / (1,677 + 2,521) = 4,613 / 4,198 - 1 = 9.9%, about 10%; debt share of underwriting 2,829 / 4,613 = 61.3%, about three-fifths; wealth channel 1,041 / 862 - 1 = 20.8%, about 21%; CET1 ratio 101,657 / 790,640 = 12.86%; 101,657 / 800,640 = 12.70%, so 10 billion of RWAs costs about 16 basis points; GBM pre-tax Q2 2026 7,499 / 4,075 - 1 = 84.0%; market value 2025 263.64 / 179.75 - 1 = 46.7% - valuation, balance sheet, capital and cost arithmetic. — FY2019-Q2 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Goldman Sachs' Forms 10-K and 10-Q, its earnings releases and presentations, JPMorgan's Form 10-K and market data; operands shown in the source line.
  11. ReportedGlobal Banking & Markets earned a 16.4% return on equity in 2025, Asset & Wealth Management 12.5% and Platform Solutions 2.1%.
    Goldman Sachs Form 10-K for fiscal 2025 - segment results on the basis restated in the fourth quarter of 2025: net revenues by line, pre-tax earnings, return on equity, average common equity, loans and assets by segment for 2023-2025 - Asset & Wealth Management and Platform Solutions segment results. — FY2023-FY2025 · publ. 25 February 2026 · source ↗
  12. ReportedEarnings per share went from $21.03 in 2019 to $51.32 in 2025, return on equity from 10.0% to 15.0%, and book value per share from $218.52 to $357.60.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - Global Banking & Markets: league tables, wallet share, clients, financing and intermediation. — FY2025 · publ. 15 January 2026 · source ↗
  13. ReportedIt reports total shareholder return of 341% since 2019.
    Goldman Sachs fourth-quarter 2025 earnings presentation and strategy update, Form 8-K exhibit 99.2 - Global Banking & Markets: league tables, wallet share, clients, financing and intermediation. — FY2025 · publ. 15 January 2026 · source ↗
Sources
Generated September 28, 2026