3 Must-Buy Investment Bank Behemoths After Solid Q4 Earnings
The investment bank industry flourished in 2025 driven by increased client activities, a rebound in underwriting and advisory businesses, a solid trading business and the massive application of artificial intelligence (AI) boosting long-term efficiency. This trend is likely to continue this year too.
The Zacks-defined Financial – Investment Bank industry is currently in the top 21% of the Zacks Industry Rank. In the past year, the industry has provided 22.9% returns, while its year-to-date return is 2.2%. Since it is ranked in the top half of the Zacks Ranked Industries, we expect the Investment Bank industry to outperform the market over the next three to six months.
At this stage, we recommend buying shares of three Investment Bank giants for stellar returns in 2026. These companies are: The Goldman Sachs Group Inc. GS, Citigroup Inc. C, and Morgan Stanley MS. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Zacks Rank #2 The Goldman Sachs Group has benefited from solid revenue growth in the Global Banking & Markets and Asset & Wealth Management divisions. GS is refocusing on the core strengths of investment banking and trading businesses through restructuring and scaling back its consumer banking footprint.
GS’ expansion in the private equity credit market is expected to diversify its revenue base. Further, a solid liquidity profile will support its capital distribution activities. In November 2025, Goldman Sachs entered into an agreement with ING Bank Slaski to divest its Polish asset management firm, TFI.
The deal is targeted for completion in the first half of 2026. In 2024, GS completed the sale of GreenSky, its home improvement lending platform, to a consortium of investors. In the third quarter of 2025, GS transitioned the General Motors credit card program.
Goldman Sachs has an expected revenue and earnings growth rate of 8.6% and 10.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 2.3% over the last 30 days.
Zacks Rank #2 Citigroup has benefited from an increase in net interest income (“NII”) and lower provisions. C’s transformation initiatives, including consumer banking exits, cost cuts and operational streamlining, position revenues to grow in the upcoming period.
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