GS Finance Corp., a subsidiary of The Goldman Sachs Group, Inc., has filed a preliminary pricing supplement for a new series of leveraged basket-linked notes due August 9, 2029, according to a disclosure dated July 20, 2026. The notes track an equally weighted basket of eight technology and software companies, offering investors 1.1 times participation in positive basket performance subject to a maximum payout cap. The structure includes a 10% downside buffer but exposes investors to significant losses if the basket declines more than 10% from initial levels.

Key Points

  • NYSE: GS-PD — GS Finance Corp. preliminary pricing supplement filed July 20, 2026
  • New notes track eight major technology stocks in an equally weighted basket structure with 1.1x upside participation and a 10% protective buffer on downside movement
  • Expected trade date August 5, 2026; maturity date August 9, 2029; original issue price 100% of face amount with estimated market value between $890 and $920 per $1,000 face amount
  • Maximum settlement amount capped at $1,850 per $1,000 face amount in positive scenarios; investors could lose significant principal if basket declines more than 10%

Technology Sector Concentration Through Equally Weighted Basket Design

The notes are structured around an equally weighted basket of eight companies, each comprising 12.50% of the basket with an initial weighted value of 12.5, according to the preliminary pricing supplement. The basket includes Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., Microsoft Corporation, Oracle Corporation, and three additional securities not fully detailed in this preliminary disclosure. This concentration in large-cap technology and software companies exposes note holders to sector-specific performance dynamics and the collective health of major cloud computing, artificial intelligence, and digital advertising businesses.

The equally weighted structure means that each of the eight basket stocks carries identical weighting throughout the note term, establishing the initial basket level at 100. The final settlement amount depends entirely on how these eight stocks perform collectively from the expected trade date of August 5, 2026, through the determination date of August 6, 2029. This three-year measurement period aligns note performance with medium-term technology sector trends, though individual stock volatility will be reflected in aggregate basket returns.

Leveraged Upside Participation With Maximum Payout Constraints

The notes offer 1.1 times participation in positive basket returns, meaning investors receive enhanced exposure to gains beyond a one-to-one correlation with the underlying basket movement. This leverage amplifies upside potential when the final basket level exceeds the initial level. However, the structure includes a maximum settlement amount of $1,850 per $1,000 face amount, which caps total returns regardless of how strongly the basket performs. For an investor holding $1,000 face amount of notes, the maximum profit is therefore limited to $850.

The leverage feature means that if the basket appreciates 10%, investors would receive $1,100 plus the $1,000 principal (subject to the cap), representing total proceeds of $1,100 per $1,000 invested. The participation multiplier of 1.1x makes the notes more sensitive to positive basket movements than a standard one-to-one structured note, but the cap ensures that exceptional basket performance does not translate into unlimited investor gains. This asymmetry between the enhanced upside multiplier and the capped maximum payout reflects the risk-return pricing embedded in the note structure.

Downside Buffer and Loss Exposure Below Protection Threshold

The notes incorporate a 10% downside buffer that provides meaningful investor protection against moderate basket declines. If the final basket level declines by up to 10% from the initial basket level, investors receive the full $1,000 face amount per $1,000 invested, with no loss of principal. This buffer protects investors during temporary market corrections or sector-wide pullbacks of modest magnitude. The buffer feature is a standard risk-mitigation element in structured notes and reflects Goldman Sachs' pricing of credit and market risk into the note structure.

However, if the final basket level declines by more than 10% from the initial level, investors face unprotected losses on the entire remaining decline. In this scenario, the return calculation equals the basket return plus 10%, meaning an investor experiences the full negative percentage decline in the basket minus the 10% buffer already provided. For example, if the basket falls 20%, investors would recover only $800 per $1,000 invested ($1,000 plus the product of -10% times $1,000), representing a $200 loss or 20% principal reduction. Larger basket declines produce proportionally larger losses, and investors could experience substantial impairment of capital if the eight stocks decline significantly over the three-year term.

Pricing, Valuation, and Secondary Market Considerations

The preliminary pricing supplement indicates an estimated value for the notes of between $890 and $920 per $1,000 face amount at the time the terms are set on the trade date, representing a meaningful discount to the 100% original issue price. This valuation reflects Goldman Sachs' internal pricing models and incorporates the credit spreads applicable to GS Finance Corp. and its guarantor, The Goldman Sachs Group, Inc. The difference between the $1,000 issue price and the estimated $890–$920 valuation represents the embedded cost of the note structure, including underwriting margins, credit risk premiums, and the leverage feature.

Goldman Sachs & Co. LLC would initially purchase or sell notes at approximately the estimated valuation plus an additional amount that declines on a straight-line basis from pricing through an unspecified date. After that date, market-making prices would approximate the then-current estimated value determined by proprietary pricing models. The disclosure emphasizes that Goldman Sachs is not obligated to make a market in the notes and that any secondary market pricing will reflect continuously updated credit spreads, implied volatility, and the remaining time value of the embedded basket options. Investors considering the purchase of additional notes after the initial offering should anticipate that pricing may differ substantially from the preliminary terms.

Guarantee Structure and Issuer Credit Risk

The notes are issued by GS Finance Corp. and are fully and unconditionally guaranteed by The Goldman Sachs Group, Inc., according to the disclosure. This guarantee means that investors have recourse to The Goldman Sachs Group's balance sheet and credit quality if GS Finance Corp. fails to meet its payment obligations at maturity. The guarantee enhances the credit quality of the notes relative to an unguaranteed security issued directly by GS Finance Corp. and reflects the consolidated financial standing of one of the world's largest investment banking and financial services firms.

The notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of or guaranteed by any bank, as stated in the preliminary pricing supplement. Despite the guarantee provided by The Goldman Sachs Group, investors bear exposure to the counterparty credit risk of both the issuer and guarantor. In the event of financial distress at The Goldman Sachs Group or a systemic financial crisis affecting major financial institutions, investors could face delays or impairment of returns at maturity or in secondary market liquidation.

Issuance Framework and Medium-Term Notes Program

The notes are part of GS Finance Corp.'s Medium-Term Notes, Series F program and will be issued under the senior debt indenture dated October 10, 2008, as supplemented. The indenture governance structure establishes The Bank of New York Mellon as trustee and outlines the terms under which GS Finance Corp. may issue debt securities. This framework allows GS Finance Corp. to issue a series of different note structures under a single registration statement, with each new offering governed by a prospectus supplement that specifies the particular terms, underlying baskets, and payment mechanics. The Medium-Term Notes framework provides flexibility for Goldman Sachs to respond to investor demand for various structured note products.

The notes will be issued in book-entry form and represented by master note number 3, dated March 22, 2021, according to the disclosure. Book-entry form means that investors will not receive physical note certificates but instead will hold their interests in electronic form through the Depository Trust Company system. This settlement mechanism standardizes trading and custody infrastructure for institutional and retail investors. The CUSIP number for the notes is 40054XSQ2, and the ISIN is US40054XSQ24, enabling identification and trading on secondary markets or electronic communication networks.

Term Sheet Timeline and Trade Date Mechanics

The preliminary pricing supplement establishes several key dates in the lifecycle of the notes. The expected trade date is August 5, 2026, on which the initial stock prices for each of the eight basket stocks will be set. These initial prices serve as the baseline reference point for calculating the initial basket level of 100 and will remain fixed throughout the note term. The original issue date is expected to be August 10, 2026, and the stated maturity date is August 9, 2029, representing a term of approximately three years from issuance.

The determination date—the date on which final stock prices are observed to calculate the final basket level and settlement amount—is expected to be August 6, 2029, three days before maturity. This three-day lag provides time for calculation and settlement processing before the final payment is made to investors on the maturity date. All stock prices are measured from the trade date through and including the determination date, capturing the full performance period of the underlying technology stocks. The timing structure ensures investors receive payment within a predictable window following the measurement period conclusion.

Material Risks and Loss Scenarios for Investors

The preliminary pricing supplement emphasizes that investors could lose a significant portion of the face amount of their notes if the underlying basket declines substantially. The 10% buffer provides protection only against modest declines, and any erosion beyond that threshold flows directly to investor losses on a dollar-for-dollar basis. An investor could experience total loss of principal if the basket declines 100% (though such an extreme scenario would require all eight underlying stocks to fall to zero), and more realistically, a 30% basket decline would result in a 20% loss on invested principal after the 10% buffer is exhausted.

Additionally, declines in individual basket stocks may offset gains in other basket stocks, meaning that even if several of the eight technology companies appreciate significantly, strong performers may be negated by underperformers or declining stocks. This diversification benefit works in both directions: concentrated weakness in any subset of the eight stocks directly reduces the aggregate basket return. Investors sensitive to technology sector cyclicality or individual company-specific risks should carefully evaluate the concentrated exposure to eight large-cap technology firms. The leverage feature on the upside amplifies gains but does not protect against downside, and the maximum payout cap means that exceptional outperformance does not generate outsized returns.

Estimated Value Discount and Secondary Market Liquidity Considerations

The estimated value of $890 to $920 per $1,000 face amount represents a 8% to 11% discount to the original issue price of 100%, reflecting the true economic value of the note to buyers at the time terms are set. This valuation incorporates the cost of the embedded options (the basket performance rights), credit spreads on GS Finance Corp. and The Goldman Sachs Group, and the underwriting margin. Investors purchasing at the 100% original issue price are effectively paying above market value, with the embedded economics favoring the issuer and underwriter in the short term.

The preliminary supplement indicates that Goldman Sachs & Co. LLC may make a secondary market in the notes but has no obligation to do so. Should a secondary market develop, pricing will fluctuate based on changes in the underlying stock prices, implied volatility of the basket stocks, the remaining time to maturity, and shifts in credit spreads for GS Finance Corp. and The Goldman Sachs Group. Investors seeking liquidity before maturity should expect bid-ask spreads reflecting the structured product nature of the notes and the limited depth of secondary markets for bespoke basket-linked securities. Early exit may result in prices below the estimated initial valuation.