Goldman Sachs has secured a lead role in SpaceX’s anticipated record-breaking IPO, a move expected to generate significant revenue and boost the bank’s dealmaking reputation. This strategic win positions Goldman to potentially lead future IPOs for tech giants like OpenAI and Anthropic.
The SpaceX IPO is projected to be the largest ever, with underwriting fees potentially exceeding $500 million, to be split among the banks involved. This deal underscores Goldman’s strength in investment banking amidst a recovering market for IPOs and M&A.
Goldman Sachs is experiencing a significant uplift in its market standing after securing a pivotal role in the highly anticipated initial public offering (IPO) of SpaceX. The rocket giant, helmed by Elon Musk, has officially selected the venerable investment bank to lead its record-setting public debut, according to a prospectus filed on Wednesday. This strategic win is more than just a financial coup; it strategically positions Goldman's formidable dealmaking division to potentially secure lead roles in other major upcoming IPOs, including those of artificial intelligence powerhouses OpenAI and Anthropic.
"This is a huge win for Goldman Sachs and a verification that this Investing Club stock is in pole position for all the big ones," remarked Jim Cramer, a prominent voice in the financial world. Reflecting this positive sentiment, shares of Goldman Sachs saw a notable surge, climbing nearly 6% on Wednesday.
SpaceX's IPO is widely expected to be the largest in history, following a recent acquisition that pegged the company's valuation at an astounding $1.25 trillion. By clinching the coveted "lead left" position on the IPO prospectus, Goldman Sachs will likely take the reins in crucial aspects such as ultimate share allocation, pricing, and valuation. This not only signifies trust but also ensures the bank will reap the most substantial portion of the associated fees.
While Goldman Sachs has declined to comment on the matter, industry experts anticipate a significant financial benefit. "It's going to be a big source of revenue," stated Jay Ritter, a University of Florida professor renowned for his extensive IPO research, often dubbed "Mr. IPO." He further noted that Goldman will share these proceeds with other syndicate members, including Morgan Stanley, Bank of America, Citigroup, and JPMorgan.
The execution of such a large-scale IPO is a complex undertaking. Matt Kennedy, a senior IPO strategist at Renaissance Capital, explained, "Pricing IPOs is often more art than science. The relationships that the bank has, the reputation of its equity research team, the ability to place the IPO with institutions, price the deal appropriately, and handle any post IPO trading." He added, "It can be hard to do."
The potential financial rewards, however, are immense. Sources familiar with the matter revealed to CNBC's Leslie Picker that SpaceX's IPO is projected to be at least double the size of Alibaba's $25 billion IPO in 2014. Alibaba's IPO generated approximately $300.4 million in underwriting commissions for the banks, roughly 1.2% of the total deal value. Applying a similar percentage to SpaceX's anticipated scale could result in underwriting fees exceeding $500 million, to be distributed among the participating banks. For context, Goldman Sachs reported total equity underwriting revenue of $535 million in the last quarter alone.
This type of high-stakes dealmaking is central to the investment thesis for Goldman Sachs. The CNBC Investing Club initiated a position in January 2025, anticipating a rebound in M&A and IPO activity during President Donald Trump's second term. So far, Goldman's dealmaking pipeline has shown significant improvement, with investment banking fees jumping 48% to $2.84 billion last quarter, surpassing analysts' estimates by approximately $340 million. While market volatility, influenced by geopolitical events, temporarily hampered IPO execution earlier in the year, CEO David Solomon expressed optimism during the company's April earnings call, stating that activity levels are expected to rebound once conditions stabilize.
The prospect of two more colossal IPOs looms large. The Wall Street Journal reported that OpenAI is preparing to confidentially file a draft of its IPO prospectus as early as Friday, with Goldman Sachs and Morgan Stanley reportedly advising the AI startup. OpenAI recently announced a record-breaking funding round of $122 billion, valuing the company at $852 billion post-money. Similarly, Anthropic secured a $30 billion raise in February, giving the creator of Claude a post-money valuation of $380 billion.
Echoing Jim Cramer's earlier sentiments, Kennedy suggested that the successful execution of the SpaceX IPO could provide Goldman Sachs with a distinct competitive advantage. "If they can pull this off, that'll help their reputation for sure, especially if they're pitching for the OpenAI and Anthropic deals," he commented.
(Note: Jim Cramer's Charitable Trust holds long positions in GS and META. A full list of stocks can be found on the Investing Club website. Investing Club members receive trade alerts before Jim makes trades, with specific waiting periods observed after alerts or CNBC TV mentions.)
