CoreWeave’s initial public offering indicates signs of a pickup in dealmaking, which could prove to be a meaningful tailwind for the likes of the Goldman Sachs Group (NYSE: GS) in 2025.
The AI cloud infrastructure company had to downsize its IPO due to macro headwinds to $40 per share.
However, it still raised $1.5 billion at a valuation of about $20 billion at a time when markets are grappling with fears of a recession ahead, which wasn’t a small feat at all.
So, shares of Goldman Sachs, down some 20% versus their year-to-date high, look attractive at writing if you’re convinced the momentum will continue in dealmaking this year.
CoreWeave reinforced Goldman’s position in the IPO market
CoreWeave printed a high of nearly $42 in its Nasdaq debut on Friday, indicating continued interest in AI names.
The relative success of its offering could prove a tailwind for Goldman Sachs as it may encourage other companies like Discord and Klarna to proceed with their IPO plans this year.
And as more businesses decide in favor of going public, the bank could earn more in advisory fees and grow its topline as we proceed through the remainder of 2025.
Note that CoreWeave’s initial public offering also helped reinforce Goldman Sachs’ position as a go-to name for major tech deals.
IPO market is showing early signs of a pickup
Data from Renaissance Capital also signals a pickup in dealmaking.
According to the IPO-tracker, about 44 offerings have been completed in the first quarter, raising a total of $9.4 billion.
In the same quarter last year, a total of 30 IPOs raised some $7.8 billion.
“A strong start was cut off by a market correction near quarter end,” as per the Renaissance report.
Renaissance Capital’s data arrives only weeks before Goldman Sachs is scheduled to report earnings for its fiscal second quarter.
The consensus is for it to earn $12.74 a share versus $11.58 per share a year ago.
Apart from potential strength in dealmaking, GS shares look attractive at the current level also because they pay a dividend yield of about 2.21% at writing.
Goldman Sachs stock could climb to $680
Analysts at Wells Fargo are also bullish on Goldman Sachs.
Last week, the firm reiterated its “overweight” rating on the financial service giant.
Its $680 price target on GS indicates potential upside of about 25% from current levels.
While the White House has stirred significant uncertainty in the markets in recent months, Wells Fargo remains convinced that Goldman Sachs will significantly benefit once the government starts to deliver on its promise of deregulation.
Other notable experts who are keeping bullish on the GS share price amidst recent weakness include famed investor and Mad Money host Jim Cramer.
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