Key Takeaways
- • Goldman Sachs forecasts global M&A volume will reach $3.8 trillion in 2026, surpassing both the 2021 cycle peak and 2025 results, marking a potential record year for dealmaking activity.
- • Large deals worth more than $10 billion jumped 24% above the 2021 prior peak in 2025, signaling momentum that typically precedes broader M&A activity across market segments.
- • AI adoption is reshaping M&A strategy, with companies increasingly focused on "terminal value"—acquiring assets to secure long-term competitive positioning rather than relying on near-term earnings growth.
- • Private equity firms face pressure to deploy capital and exit long-held portfolio positions, creating a significant tailwind for deal flow alongside $5+ trillion in available corporate and PE capital.
- • Tim Ingrassia, Co-Chairman of Global M&A at Goldman Sachs, notes the current cycle is in year four of a typical six-to-seven year cycle, indicating substantial room for growth before peak conditions emerge.
Summary
Goldman Sachs projects merger and acquisition activity will reach $3.8 trillion in 2026, a figure that would exceed the previous cycle high achieved in 2021 and represent a substantial increase from 2025 results. According to Tim Ingrassia, Co-Chairman of Global Mergers and Acquisitions at Goldman Sachs, this outlook reflects a market still in the middle stages of its expansion phase. Ingrassia emphasized that M&A cycles typically last six to seven years, and the current market is only in year four, suggesting momentum remains uninterrupted and significant additional activity could follow.
Two primary factors are propelling this forecast. First, artificial intelligence is fundamentally altering how corporate leaders evaluate deal opportunities and company valuations. Ingrassia describes a shift toward what he calls the "tyranny of terminal value," wherein firms increasingly assess businesses based on projected long-term worth rather than current financial performance. This strategic reorientation compels acquirers to pursue M&A activity aggressively to secure competitive positioning and future revenue streams. Second, private equity firms are under mounting pressure to realize returns on investments and exit mature portfolio holdings, creating substantial deal flow as they seek to liquidate assets and return capital to limited partners.
The strength of large-cap dealmaking provides further evidence of cycle momentum. Transactions valued above $10 billion increased 24% in 2025 relative to the 2021 previous peak, a metric that historically precedes broader activity among mid-market and smaller deal categories. Goldman Sachs notes that 2025 generated fewer deals overall—1,080 transactions above $500 million versus approximately 1,255 in 2021—yet transaction values grew 3.5% despite the reduction in deal count, indicating the market is generating greater value per transaction with room for additional volume expansion.
Goldman Sachs identifies multiple capital sources fueling this environment, including more than $5 trillion in corporate cash reserves and private equity dry powder awaiting deployment. Key growth sectors likely to experience elevated M&A activity include technology, AI infrastructure, energy, and semiconductors. However, Ingrassia cautioned that geopolitical and macroeconomic uncertainty, including energy volatility from regional conflicts, warrant measured confidence in forecasts. He noted that the Goldman Sachs US Economic Policy Uncertainty Index approaches levels seen when tariff tensions elevated in May 2025, and corporate leaders may exercise caution on near-term decision-making. Nevertheless, market participants have largely adapted to uncertainty as a persistent feature of the current environment.
Two primary factors are propelling this forecast. First, artificial intelligence is fundamentally altering how corporate leaders evaluate deal opportunities and company valuations. Ingrassia describes a shift toward what he calls the "tyranny of terminal value," wherein firms increasingly assess businesses based on projected long-term worth rather than current financial performance. This strategic reorientation compels acquirers to pursue M&A activity aggressively to secure competitive positioning and future revenue streams. Second, private equity firms are under mounting pressure to realize returns on investments and exit mature portfolio holdings, creating substantial deal flow as they seek to liquidate assets and return capital to limited partners.
The strength of large-cap dealmaking provides further evidence of cycle momentum. Transactions valued above $10 billion increased 24% in 2025 relative to the 2021 previous peak, a metric that historically precedes broader activity among mid-market and smaller deal categories. Goldman Sachs notes that 2025 generated fewer deals overall—1,080 transactions above $500 million versus approximately 1,255 in 2021—yet transaction values grew 3.5% despite the reduction in deal count, indicating the market is generating greater value per transaction with room for additional volume expansion.
Goldman Sachs identifies multiple capital sources fueling this environment, including more than $5 trillion in corporate cash reserves and private equity dry powder awaiting deployment. Key growth sectors likely to experience elevated M&A activity include technology, AI infrastructure, energy, and semiconductors. However, Ingrassia cautioned that geopolitical and macroeconomic uncertainty, including energy volatility from regional conflicts, warrant measured confidence in forecasts. He noted that the Goldman Sachs US Economic Policy Uncertainty Index approaches levels seen when tariff tensions elevated in May 2025, and corporate leaders may exercise caution on near-term decision-making. Nevertheless, market participants have largely adapted to uncertainty as a persistent feature of the current environment.
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