In this article, we discuss 12 bank stocks to buy according to Goldman Sachs.
Bank executives entered 2025 with cautious optimism, as inflation eased and interest rates were dipping, but slow economic growth, global tensions, and regulatory uncertainty kept them on edge. Still, a Deloitte report mentioned that many bankers will be relieved to move on from 2024.
This cautious sentiment set the stage for economic forecasts that pointed to both opportunities and challenges. In 2025, American GDP growth was projected to slip to 1.5% under Deloitte’s baseline forecast, with risks ranging from weaker consumer spending and rising unemployment to global conflicts and trade barriers. However, a technology-led productivity boost could lift growth closer to 1.9%, while persistent inflation could slow it to 1%.
These projections were closely linked to central banks’ monetary policy choices, which were expected to shape the global financial environment. The European Central Bank may lower rates to 2.75% by the end of the year, while the Bank of England and Bank of Canada are likely to cut rates as well. The Bank of Japan, however, could face more constraints as it tries to manage slow growth and inflation after years of deflation. Overall, most economies will move toward easing, though rate changes may not happen at the same pace everywhere.
Against this global backdrop, the US financial industry is looking at the second half of 2025 with cautious optimism. After being hit by tariff hikes earlier this year, banks now feel more confident about handling policy changes. They forecast robust consumer spending, reduced interest rates, and positive impacts from new regulations and artificial intelligence. At the Morgan Stanley US Financials Conference in June, executives said investment banking should improve, with higher mergers, acquisitions, and IPOs likely, especially if the Federal Reserve continues to cut rates.
Regulatory shifts were seen as another important driver of sentiment. Banks expect proper guidelines under the Trump administration to enhance activity, especially in M&A. Crypto is also gaining traction as new regulations make it convenient for banks and asset managers to offer digital asset products, though building the necessary infrastructure will still take time.
In this article, we will take a look at the best bank stocks to buy according to Goldman Sachs.
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Our Methodology
For this article, we manually searched the portfolio of Goldman Sachs as of Q2 2025, handpicking the bank stocks where the institutional investor had the highest stakes. The stocks are ranked according to Goldman Sachs’ stake value, and the hedge fund sentiment as of the June quarter is also mentioned for further context.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Fidelity National Information Services, Inc. (NYSE:FIS)
Number of Hedge Fund Holders: 49
Goldman Sachs’ Stake Value: $739,238,897
Fidelity National Information Services, Inc. (NYSE:FIS) is one of the best Goldman Sachs bank stocks. On August 5, Raymond James trimmed the price target on Fidelity National to $88 from $95, while assigning an Outperform rating on the stock following the Q2 2025 earnings.
The company announced a slight 1% sales beat, with adjusted earnings per share matching estimates. Adjusted EBITDA margins were the same as last year, falling short of Street expectations for a 20 basis point gain. FIS presently carries a P/E ratio of 45.33, supported by 2.92% revenue growth over the past year.
Raymond James cited weaker-than-anticipated margin guidance for Q3, as FIS projected 60 basis points of growth compared to the expected 150 basis points, and shifted its full-year margin forecast downward.
The lowered price target led to an 8% drop in FIS shares, with Raymond James observing that it reflects growing investor concerns over competitive and pricing dynamics.
Although challenges persist, Raymond James upheld its Outperform rating, noting that FIS’s full-year guidance for FX-adjusted organic revenue and adjusted EPS is mostly intact, given the minor interest and tax tailwinds.
Fidelity National Information Services, Inc. (NYSE:FIS) is a global financial technology company that provides banking, payments, risk management, compliance, wealth, and trading solutions.
11. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 102
Goldman Sachs’ Stake Value: $804,002,702
Citigroup Inc. (NYSE:C) is one of the best Goldman Sachs bank stocks. On September 25, Citi shares, valued at $187.7 billion, shot higher after striking a deal to sell a 25% Banamex stake for around $2.3 billion.
TD Cowen reiterated its Hold rating on Citi with a $95 target, noting that the sale is a positive step toward simplifying the company’s model and trimming its worldwide operations.
This sale is part of Citi’s broader push to retreat from legacy international markets, with leadership focusing on its goal of a full Banamex exit.
In spite of the positive momentum, TD Cowen maintains a neutral outlook, cautioning investors that stablecoin adoption under the Genius Act could weigh on Citi’s Services arm.
The bank’s shares have rallied 73.5% in a year, far above the 15% industry median, indicating that recent strength may already factor in good news.
10. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 100
Goldman Sachs’ Stake Value: $821,879,201
The Charles Schwab Corporation (NYSE:SCHW) is one of the best Goldman Sachs bank stocks. On September 15, Charles Schwab’s core net new assets came in at $44.4 billion for August 2025, a 35% jump from the prior year.
The company reported $11.23 trillion in client assets as of August, a 15% year-over-year increase and a 2% rise compared to July 2025, aligning with its 52.5% annual stock return.
The firm opened 382,000 brokerage accounts in August, up 18% from last year, as total active accounts expanded to 37.8 million, a 5% year-over-year increase.
The Charles Schwab Corporation (NYSE:SCHW) saw margin loan balances rise 6% on the month to $90.4 billion, a 23% boost from a year ago, while daily trades punched in above 7 million for the eighth month consistently. According to the report, derivatives represented 22.5% of trading volume, 170 basis points higher than a year ago.
At the close of August, transactional sweep cash stood at $406.7 billion, down $0.8 billion, driven by a decline in client net buying. Client cash remained at 9.5% of assets, consistent with the prior year. According to the company’s release, ETFs saw $23 billion in net inflows in August, while mutual funds lost $2.2 billion.
9. The Toronto-Dominion Bank (NYSE:TD)
Number of Hedge Fund Holders: 23
Goldman Sachs’ Stake Value: $1,252,991,876
The Toronto-Dominion Bank (NYSE:TD) is one of the best Goldman Sachs bank stocks. On August 13, Desjardins changed the rating on Toronto-Dominion Bank to Buy from Hold to Buy, while also bumping up its price target to C$107 from C$97.
According to Desjardins, the bank’s communication has improved significantly over the last half-year, which led to the upgrade. The positive outlook also reflects the firm’s focus on TD’s strong Canadian P&C banking segment and resilient deposit franchise.
While risks related to anti-money laundering remediation and the US asset cap persist, Desjardins highlighted that they impact just 25% of earnings and are well disclosed, with upside potential in American banking next year.
The Toronto-Dominion Bank (NYSE:TD) is a major financial institution that serves customers in Canada, the United States, and internationally. It operates through four main segments, namely Canadian Personal and Commercial Banking, US Retail, Wealth Management and Insurance, and Wholesale Banking.
8. Royal Bank of Canada (NYSE:RY)
Number of Hedge Fund Holders: 28
Goldman Sachs’ Stake Value: $1,266,277,135
Royal Bank of Canada (NYSE:RY) is one of the best Goldman Sachs bank stocks. On August 28, BMO Capital assigned an Outperform rating to RY and lifted the price target from C$190 to C$203.
Royal Bank of Canada’s strong quarterly results supported the price target increase, with earnings per share of $3.84 topping BMO Capital’s $3.36 estimate and the $3.32 Street consensus. The bank has also shelled out dividend payments for 53 years.
According to BMO Capital, the upside surprise demonstrated broad-based momentum, driven by solid performance in Personal Banking and Capital Markets. The Personal Banking segment gained from higher net interest margins, loan expansion, and stronger net interest income.
Stronger trading revenue and improved Corporate & Investment Banking income also contributed to the outperformance, BMO observed.
Royal Bank of Canada (NYSE:RY), founded in 1864 and headquartered in Toronto, offers services such as loans, savings, credit cards, wealth planning, insurance, and financial advisory through segments including Personal and Commercial Banking, Wealth Management, Insurance, and Capital Markets.
7. Capital One Financial Corporation (NYSE:COF)
Number of Hedge Fund Holders: 132
Goldman Sachs’ Stake Value: $1,404,219,316
Capital One Financial Corporation (NYSE:COF) is one of the best Goldman Sachs bank stocks. On August 15, BofA assigned a Buy rating to COF and lifted the price target on the shares to $245 from $244.
Capital One reported July figures that indicated better net charge-off rates, while there was a small increase in delinquencies. It is important to note that the bank has adopted a consolidated reporting approach and did not break out Discover card performance in the latest filing.
The bank’s card portfolio grew slowly, with low single-digit gains, an indication to BofA that Capital One continues to apply tight underwriting standards.
BofA Securities maintained its Buy rating on COF, with analyst Mihir Bhatia pointing to the positive long-term gains from the Discover purchase.
6. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 70
Goldman Sachs’ Stake Value: $1,409,136,257
American Express Company (NYSE:AXP) is one of the best Goldman Sachs bank stocks. On September 19, KBW reiterated an Outperform rating on AXP, along with a price target of $371, attributing the call to the new features in the Platinum card.
According to KBW, the improved perks make the Platinum card’s value proposition stronger than the $200 fee hike, reinforcing its premium status. The firm noted American Express Company (NYSE:AXP)’s collaborations with Lululemon, Uber, and Walmart also strengthen the cardholder value proposition.
The firm observed that the impact on earnings will phase in, given AXP’s practice of amortizing annual fees across a year. KBW believes the new features will aid both sign-ups and renewals, setting the stage for stronger performance in the coming quarters.
American Express Company (NYSE:AXP) is a global financial company that offers credit and charge cards, banking, travel, lifestyle, and expense management services, along with fraud prevention and loyalty programs.
5. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 75
Goldman Sachs’ Stake Value: $1,581,208,274
Wells Fargo & Company (NYSE:WFC) is one of the best Goldman Sachs bank stocks. On September 17, a bloc of 15 Democratic senators, under Arizona’s Ruben Gallego’s leadership, asked Wells Fargo to end what they called efforts to discourage employee unionization.
The group told CEO Charlie Scharf in a letter that developing better labor relations may reduce what they consider a toxic workplace and help the bank rebound from past controversies.
The lawmakers asserted that Wells Fargo & Company (NYSE:WFC) has taken a notably harsher stance against staff seeking to organize unions in states including Arizona, Florida, North Carolina, and Wyoming. The senators’ letter mentioned that six charges of unfair labor practices were brought before the National Labor Relations Board (NLRB) against WFC this year.
The group also claimed that aggressive sales quotas in the bank’s past have contributed to customer mistreatment, lack of staff, and low wages, which led employees to seek unions.
The letter highlighted employees’ rights to fair pay, safe conditions, and whistleblower protections as well, pressing Scharf to halt the company’s anti-union initiatives.
4. The Bank of Nova Scotia (NYSE:BNS)
Number of Hedge Fund Holders: 20
Goldman Sachs’ Stake Value: $1,837,200,085
The Bank of Nova Scotia (NYSE:BNS) is one of the best Goldman Sachs bank stocks. On September 16, the bank announced adjustments to its agents and registrars handling existing bond issues, with changes commencing from September 29, 2025.
The regulatory filing mentioned that Scotiabank’s London Branch will give up its duties as Paying Agent, Transfer Agent, and Registrar for existing bonds, and they will be taken over by Citibank’s London Branch. Moreover, Bank of Nova Scotia’s New York Agency will also withdraw from its functions as Paying Agent, Transfer Agent, Registrar, and Exchange Agent, succeeded by Citibank Europe Plc.
The disclosure confirmed that UBS AG will continue acting as Swiss Paying Agent for the bank’s CHF issues.
The changes include a range of the bank’s covered bonds, including euro bonds with maturities from 2026 to 2041, pound-linked floating rate notes due in 2026, US dollar bonds maturing in 2026 and 2027, and Swiss franc bonds maturing between 2025 and 2029.
Altogether, the affected bonds total EUR 7.56 billion, GBP 2.6 billion, USD 5.75 billion, and CHF 1.36 billion across multiple rates and maturity schedules.
The Bank of Nova Scotia (NYSE:BNS) is a Toronto-based bank that provides personal banking services and business banking solutions such as lending and trade finance.
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 115
Goldman Sachs’ Stake Value: $2,062,292,436
Bank of America Corporation (NYSE:BAC) is one of the best Goldman Sachs bank stocks. On September 9, KBW assigned an Outperform rating on BAC, along with a price target of $57.
KBW analyst Chris McGratty assigned the Outperform rating after comments from Bank of America CFO Alastair Borthwick at a peer conference addressing market conditions and expected results. The stock trades at a P/E of 14.35 and provides a 2.26% dividend yield, reflecting consistent returns for investors.
KBW also pointed out that BAC’s team provided commentary on net interest income trends and upcoming Q3 2025 capital markets performance during the presentation. According to the report, expectations for stronger capital markets in Q3 2025 are offset by higher cost forecasts, resulting in a more even financial outlook.
2. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 67
Goldman Sachs’ Stake Value: $2,221,569,414
Morgan Stanley (NYSE:MS) is one of the best Goldman Sachs bank stocks. On September 23, Morgan Stanley announced that it aims to offer cryptocurrency trading on ETrade starting in H1 2026 through a partnership with Zerohash, a company specializing in digital asset infrastructure.
According to the bank, ETrade users will have the option to trade Bitcoin, Ether, and Solana once the new service is deployed.
Cryptocurrency was once considered purely speculative, but they have exploded into a $3.9 trillion market. Data from CoinMarketCap indicates that Bitcoin stands at nearly $2.25 trillion and Ether at $506 billion.
The Trump administration’s feasible regulations have propelled the expansion of cryptocurrencies and nudged Wall Street brokerages to add more offerings.
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 124
Goldman Sachs’ Stake Value: $6,128,769,582
JPMorgan Chase & Co. (NYSE:JPM) is one of the best Goldman Sachs bank stocks. On September 22, the bank hired three senior employees in its mid-cap investment banking segment to refine its capabilities and bolster its role in transactions.
JPM mentioned that Rohan Juneja, Ryan Lake, and Lauren Vitale will be added to its mid-cap banking group of over 250 members, which caters to midsize companies and investors. The division is responsible for more than 175 transactions in 2025 despite turbulent markets.
Former Jefferies banker Rohan Juneja will assume the role of managing director in New York, with a focus on media and communications. Ryan Lake, working priorly with Arlington Capital Advisors, will hold a managing director position in Phoenix, specializing in alcoholic and non-alcoholic beverages. Lauren Vitale from Lincoln International has been appointed executive director in Chicago, where she will head the education and business services.
JPMorgan’s global head of mid-cap investment banking, John Richert, commented that mid-cap firms and their investors are crucial for the economy, and help strengthen innovation, employment, and vital services. He also pointed out that the mid-cap group has grown by 40% over the last year.
While we acknowledge the potential of JPM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than JPM and that has 100x upside potential, check out our report about this cheapest AI stock.
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