• David Solomon forecasts 2026 will feature "very, very large IPOs, unprecedented in size" and a surge in M&A activity
  • The outlook is driven by pent-up private equity capital, stabilizing interest rates, deregulation, and AI investment demands
  • Goldman Sachs (GS), which topped global M&A rankings in 2025, is positioning for what Solomon calls a "dealmaking renaissance"

Goldman Sachs CEO David Solomon is making a bold prediction for 2026: the year will witness an extraordinary wave of initial public offerings, including some of the largest in history, alongside a significant acceleration in merger and acquisition activity. Speaking recently, Solomon pointed to several converging factors that he believes will create ideal conditions for blockbuster deals.

"We're going to see potentially, some very, very large IPOs, unprecedented in size this year," Solomon said, according to people familiar with his remarks. The Goldman chief, who has been predicting a "dealmaking renaissance" for two years, now sees 2026 shaping up as a "top decile" year for M&A activity.

Behind this optimism lies a powerful combination of financial forces. Private equity firms are sitting on over $2 trillion in "dry powder"—capital raised but not yet deployed—creating intense pressure to find exit opportunities through IPOs, sales, or acquisitions. This backlog has been building since late 2022, when rising interest rates and market volatility slowed dealmaking to a crawl.

Stabilizing Federal Reserve rates have reopened high-yield bond and leveraged loan markets, enabling the financing of mega-deals that were previously difficult to structure. Meanwhile, artificial intelligence investments are creating substantial capital needs, with technology firms increasingly tapping debt markets to fund their expansion.

Solomon also cited a significant shift in the U.S. regulatory environment under the current administration, describing how M&A reviews have moved from "no" to "maybe" in Washington. This deregulatory tailwind has replaced the friction that characterized previous years, according to sources familiar with Goldman's internal assessments.

Goldman's own risk appetite gauge—a measure of client confidence in pursuing growth opportunities—hit the 96th percentile in early 2026, signaling what one insider called "a fundamental shift in market psychology." Deal pipelines across Wall Street are growing, with CEOs increasingly shifting from defensive to offensive strategies.

The investment bank, which topped global M&A rankings in 2025 by advising on $1.48 trillion in deals, has been positioning itself for this expected surge. Recent quarters have shown robust investment banking revenues, particularly in advisory fees, following Goldman's pivot away from unprofitable consumer banking ventures like Marcus.

"What we're seeing is the normalization of activity into late 2025 and 2026," Solomon reportedly told colleagues, staking his reputation on this bullish outlook. Competitors including JPMorgan Chase (JPM) and boutique advisory firms are making similar preparations, though Goldman's deep relationships with private equity sponsors—a group Solomon has specifically highlighted—could give it an edge in capturing the coming wave of business.

Industry observers note that while the short-term outlook appears strong, the sustainability of this cycle will depend on continued favorable financing conditions. If rates remain stable and regulatory headwinds don't reemerge, Solomon's prediction of a multi-year dealmaking cycle could materialize, creating significant opportunities for risk assets and financial sponsors.

Correction: An earlier version of this article incorrectly stated the timing of Solomon's comments; they were made in early 2026, not late 2025.