Goldman Sachs returns to the top of Wall Street's stock capital market! "Predictive market" may become the next revenue-generating tool.

Financial giant Goldman Sachs Group, Inc. (GS.US) returned to the top of Wall Street's equity capital markets (ECM) revenue rankings in the last quarter of last year. This happened as various Wall Street banking giants were competing for the underwriting roles of large projects, including OpenAI, Anthropic, and SpaceX, expected to conduct their initial public offerings (IPOs) in the US stock market in 2026. Additionally, Goldman Sachs Group, Inc. is closely monitoring significant investment opportunities in the prediction markets field, aiming to benefit from this rapidly growing platform focused on betting on real-world events, striving to become a prediction market platform similar to Polymarket. The New York-based financial powerhouse reported that in the last three months of 2025, its equity underwriting revenue was about $521 million, surpassing Morgan Stanley's $494 million and JPMorgan Chase's $416 million in the same business revenue category. Specifically, global capital market investment activity has seen continuous growth for four consecutive years. According to a compiled statistic from institutions, the total amount of global initial public offerings (IPOs), stock sales, and convertible bond activities has increased to a staggering $841.8 billion, although this amount is still just over half of the record amount set in 2021. Difficult to surpass in the short term Goldman Sachs Group, Inc. CEO David Solomon stated that the revenue data of equity underwriting business for the last three months of 2025 is unlikely to be surpassed in the short term. As shown in the graph above, Goldman Sachs Group, Inc. led the way in Wall Street's fourth-quarter equity underwriting business. "I speculate that the overall level of the stock capital market in 2026 will still be significantly lower than the peak in 2021 but slightly higher than this year's level, and it is difficult to accurately predict the quarterly level," Solomon told analysts in the bank's earnings conference call on Thursday. Goldman Sachs Group, Inc. enjoyed a shining moment at the end of 2025 with its dominant role in the $7.2 billion IPO of the US healthcare giant Medline Inc., the largest IPO in the US market that year and the largest IPO since Porsche AG went public in 2022. Including the so-called oversubscription options, the 47 large commercial banks involved in the issuance of Medline shared $156.5 million in fees, with over a third going to the equity underwriting teams led by Goldman Sachs Group, Inc. and Morgan Stanley. Despite handling some large-scale IPO projects in the US, Europe, and India, as well as a wave of busy convertible bond issuances, the overall revenue growth of Goldman Sachs Group, Inc. and Morgan Stanley in the equity capital market in the fourth quarter of 2025 was only a single-digit percentage increase compared to the same period in 2024. In terms of overall performance in 2025, Morgan Stanley performed exceptionally well, increasing the overall revenue from equity capital markets in the full year of 2025 by 23%, reaching $1.97 billion. "The stock underwriting business remains strong, driven by primary stock and IPO issuance, contributing to the consistent market performance," Morgan Stanley Chief Financial Officer Sharon Yeshaya told analysts during Thursday's performance conference call. Institutional investors in the financial market widely expect 2026 to be a breakthrough year for equity capital market business, as some of the largest private tech companies, especially Elon Musk's global space exploration leader SpaceX, are considering going public as early as this year. "We have many big companies waiting in line, and I think for various reasons, they are reaching a critical decision to say, you know what, it's time for us to go public," Goldman Sachs Group, Inc. CEO Solomon stated during the earnings conference call. He also predicted that large private equity firms may push more portfolio companies towards public trading markets like the US stock exchange. Major news! Goldman Sachs Group, Inc. does not want to miss the "everything can be bet on" era and is considering entering the "prediction market" Goldman Sachs Group, Inc. is exploring entering the prediction market and studying how to fully benefit from this rapidly growing but relatively lightly regulated market, the CEO of this Wall Street financial giant stated on Thursday. "We have a team spending time collaborating with them and delving into this area of research," Solomon emphasized during the institution's fourth-quarter earnings conference call. In the past two weeks, Solomon personally met with the leadership of two prediction market companies, Polymarket and Kalshi, spending "several hours with each company to gain a deep understanding of the prediction market." Undoubtedly, Goldman Sachs Group, Inc. entering the prediction market will bring intense competition with retail trading apps like Robinhood Markets (HOOD.US), which saw a significant drop of 7.79% in its stock price by the Thursday market close as some investors began questioning how Robinhood will compete and maintain its growth momentum in the field if Goldman Sachs Group, Inc. one of the largest investment banks on Wall Street enters the market. Solomon stated that there is potential to see prediction market contracts regulated by the Commodity Futures Trading Commission (CFTC) aligning with their business, but he cautioned that the specific layout of the prediction market might take longer than some investors expect. The "prediction market" has become popular globally since the end of the 2024 US presidential election when almost everyone was enthusiastic about betting real money on Polymarket about who would win the US presidential election, signaling the era of "everything can be bet on." What is the definition of a "prediction market company"? These companies essentially turn real-world events into tradable binary contracts on their platform: contracts are usually settled as yes/no (e.g., whether an event will occur), and prices can be interpreted as the market pricing the probability; in the US context, these contracts are often packaged as regulated derivatives called "event contracts." Undoubtedly, the introduction of contract trading through platforms like Robinhood with a large user base and the entry of traditional giants like ICE and CME significantly enhance the credibility and user outreach of the entire prediction industry. Prediction markets enter the sports arena through event contracts, attracting trading volumes in some states where sports betting is not legal, becoming an important source of increment for platforms like Kalshi, while also sparking compliance disputes and attention at the state level. Furthermore, some Wall Street investment firms and professional trading funds begin using it to bet/hedge macro and company event probabilities (e.g., Fed monetary policy, success/failure of major mergers) since the binary contract structure enables a more "pure" expression. An analysis team from the well-known Wall Street financial institution, Citizens Financial Group Inc., estimated that the industry's annual revenue is currently around $20 billion. They believe that the prediction business on the global internet securities trading platform favored by retail traders, Robinhood Markets Inc., is the product that has seen the fastest user expansion in the history of the internet securities platform and has already contributed about 10% of the company's revenue scale. The term "prediction market company" typically refers to platforms like Kalshi and Polymarket that offer trading of "event contracts." Other players emerging in the same space recently include Crypto.com (partnering with Kalshi to push industry lobbying efforts) and Gemini, which just received regulatory approval to advance into the prediction market business. Traditional exchanges/sports betting companies are also accelerating their entry into the field (such as CME and FanDuel's collaboration on a new trading platform, ICE's investment in Polymarket).