Jim Cramer flags key move Goldman Sachs may need next

What happens when a bank beats expectations, but the stock still falls? That’s the question investors are asking after Goldman Sachs delivered strong first-quarter results, only to see shares slip. Jim Cramer was quick to weigh in, pointing to what he sees as the missing piece. 

“Goldman will come back. Needs buyback to restart. Will be a few days,” he wrote on X.

His comments come from a point of confidence in Goldman’s fundamentals while suggesting near-term momentum may depend on renewed share repurchases.

Cramer, host of CNBC’s Mad Money and co-anchor of Squawk on the Street, is also the founder of TheStreet and a former hedge fund manager known for delivering a 24% compounded return over 14 years at his firm.

His take zeroes in on the key issue. If the fundamentals are strong, what’s holding the stock back?  The comment also comes as Goldman Sachs’ stock dipped about 1.9% to close near $890.79 on April 13, even after posting an earnings beat. 

Goldman Sachs earnings beat expectations, but stock still falls

Goldman Sachs delivered a strong set of numbers, clearly showing everybody why it’s one of Wall Street’s top-performing banks.

Goldman Sachs delivered a “very strong” first quarter, posting $17.2 billion in net revenue, up from $15.06 billion a year earlier, $5.6 billion in net earnings, and EPS of $17.55 (above $16.34 analysts’ expectations).

The bank also returned $6.4 billion to shareholders, including a record $5.0 billion in buybacks, and ended the quarter with a CET1 ratio of 12.5%.

Related: Goldman Sachs issues brutal jobs warning to American employees

“Goldman Sachs delivered a very strong performance for our shareholders this quarter, even as market conditions became more volatile. Our clients continue to depend on us for high-quality execution and insights amid the broader uncertainty, and we remain confident in how we’ve positioned our businesses.” David Solomon, Chairman and CEO of Goldman Sachs, said.

The bank’s Global Banking & Markets division stood out, generating a record $12.7 billion in revenue. Investment banking fees surged 48% year-over-year, driven by a rebound in mergers and acquisitions activity.

So why did the stock fall? Investors appeared focused on weaker performance in fixed income, currencies, and commodities (FICC), where revenue dropped 10% year-over-year. Rising operating expenses, up 14%, also raised concerns about cost pressures.

Jim Cramer says buybacks could spark Goldman rebound

Cramer’s take cuts straight to the point that strong fundamentals alone may not be enough in the current market environment.

Instead, Cramer believes share repurchases could provide the spark Goldman Sachs needs to regain upward momentum.

And there’s reason to think that’s possible. During the first quarter, Goldman returned $6.38 billion to common shareholders, including a record $5 billion of common share buybacks. That covered 5.4 million shares at an average cost of $923.49.

Related: Goldman Sachs drops a bombshell on software stocks

With additional buyback capacity still available, Cramer suggests the bank could lean more heavily into repurchases to support its stock.

I also think this matters too. Why? Buybacks reduce the number of shares outstanding, often boosting earnings per share. So, this is likely a factor that can attract investors.

Key drivers behind Goldman’s mixed market reaction

While Goldman’s headline numbers were strong, several underlying factors explain the cautious market response. One key issue was the Apple Card portfolio. The bank recorded markdowns after moving the loan book to “held for sale” status, weighing on overall performance.

At the same time, FICC weakness highlighted softer trading conditions in areas like interest rate products and mortgages. Still, not everything was negative.

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Equities trading revenue jumped 27% year-over-year to $5.33 billion, fueled by strong demand in financing and trading activity. Asset and wealth management also posted a 10% annual increase in revenue.

Provision for credit losses rose slightly to $315 million, reflecting loan growth and some impairments, another signal that risks are building in certain areas.

Goldman Sachs stock could use a boost, according to Cramer.

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Goldman Sachs stock performance remains strong, too

Despite a recent dip, Goldman Sachs stock has delivered standout returns over time, significantly outperforming the broader market across multiple periods, as Yahoo Finance reports.

Key highlights for Goldman Sachs:YTD return: Up1.87% vs S&P 500 +0.60%1-year return: Up 83.89% vs 28.39% surge3-year return: Up 188.65% vs 66.08% gain5-year return: Up 206.54% vs 66.27% gain

The data shows strong long-term momentum, even as short-term price movements remain low. That alone answers your question why investors still believe in the bank’s long-term strategy.

Now, the focus is whether Goldman Sachs will double down on buybacks. And whether that will be enough to reignite investor enthusiasm.

Related: Goldman Sachs just made a big call on Amazon stock

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