Goldman Sachs Finance Issues $17.3 Million NVIDIA-Linked Auto-Callable Securities with Principal at Risk

Product Structure and NVIDIA Stock Performance Linkage

GS Finance Corp. structured these securities as unsecured notes guaranteed by The Goldman Sachs Group, Inc., with returns entirely dependent on NVIDIA Corporation common stock performance measured over a three-year period. The initial share price was established at $202.81, representing the closing price on the pricing date of July 17, 2026. The disclosure indicates that investors will not participate in any upside appreciation of NVIDIA stock above the initial price level, meaning the securities cap gains at the contingent coupon rate while exposing holders to substantial downside losses.

The contingent quarterly coupon structure provides scheduled payments on twelve observation dates spanning from October 2026 through July 2029. According to the disclosure, the coupon payment mechanism calculates cumulative accrued amounts by multiplying $25.875 by the number of observation dates completed up to each payment date, minus previously paid coupons. However, this formula only applies when NVIDIA's stock price remains at or above the downside threshold price of $101.405 on the coupon observation date. If the stock closes below this 50-percent threshold on any observation date, the coupon payment for that period drops to zero and investors receive no payment.

Automatic Call Feature and Early Redemption Mechanics

The securities incorporate an automatic call feature that terminates the investment early if NVIDIA stock appreciates sufficiently during the holding period. The disclosure specifies that if the closing price on any call observation date equals or exceeds the initial share price of $202.81, Goldman Sachs will automatically redeem the securities at par value ($1,000 per $1,000 principal) plus any contingent quarterly coupon then due. This automatic call mechanism begins on October 19, 2026—just three months after the original issue date—and applies to each subsequent coupon observation date through April 17, 2029.

The automatic redemption feature creates a scenario where investors' returns are capped regardless of NVIDIA's stock performance. The disclosure clarifies that once called, no further payments accrue after the call payment date. This structure means investors benefit only from coupon payments accumulated up to the call date plus principal recovery, whereas NVIDIA shareholders would participate fully in the stock's continued appreciation. For investors seeking exposure to significant NVIDIA upside movement, these securities provide no such participation beyond the structured coupon rate.

Principal-at-Risk Payment Structure at Maturity

At stated maturity on July 20, 2029, the payment amount depends entirely on NVIDIA's final share price compared to the downside threshold. The disclosure states that if the final share price is greater than or equal to $101.405, investors receive their full $1,000 principal amount for each $1,000 invested, plus any final contingent quarterly coupon. However, if NVIDIA's stock closes below the $101.405 threshold on the determination date (July 17, 2029), investors do not receive the final coupon and experience a principal loss calculated as $1,000 multiplied by the share performance factor.

This share performance factor formula—final share price divided by initial share price—means that losses scale proportionally with NVIDIA's stock decline. For example, if NVIDIA stock falls to $101.405 or below by determination date, the share performance factor would equal approximately 0.50 or less, resulting in investors recovering only 50 cents or less per dollar invested. The disclosure explicitly warns that investors may lose a significant portion or all of their investment if NVIDIA stock declines substantially. This principal-at-risk structure fundamentally distinguishes these securities from traditional fixed-income instruments where principal recovery is typically assured by the issuer.

Offering Terms and Pricing Details

GS Finance Corp. priced these securities on July 17, 2026, with an original issue date of July 22, 2026, and established the initial aggregate principal amount at $17.32 million. The disclosure indicates that Goldman Sachs retained the option to increase this aggregate principal amount by selling additional securities on dates subsequent to the pricing date at potentially different prices and discount rates. The original issue price was set at 100 percent of principal amount, meaning investors paid par value to acquire the securities on the initial offering date.

Goldman Sachs & Co. LLC served as the sole underwriter and received a 2.25 percent underwriting discount totaling $389,700 across the initial offering, resulting in net proceeds to the issuer of $16.93 million. Morgan Stanley Wealth Management acted as dealer and received a selling concession of $22.50 per security sold, with an internal allocation of $5.00 per security designated as a structuring fee. The disclosure specifies that the estimated value of the securities at pricing was approximately $966 per $1,000 principal amount, indicating an immediate $34 discount below par that reflects the structured nature of the product and pricing model inputs including credit spreads.

Credit Risk and Guarantor Protection

The securities are unsecured obligations of GS Finance Corp., but carry a guarantee from The Goldman Sachs Group, Inc., which operates as the parent guarantor. The disclosure emphasizes that these securities carry the credit risk of both the issuer and the guarantor, meaning investors depend on the creditworthiness of both entities for payment of principal and coupons. The guarantee does not address the performance-dependent nature of the contingent coupons; rather, it ensures that if GS Finance Corp. fails to pay amounts owed, The Goldman Sachs Group will meet those obligations. However, if NVIDIA stock performs poorly, the contingent coupon simply does not accrue regardless of either entity's creditworthiness.

The disclosure states explicitly that these securities are not bank deposits and carry no Federal Deposit Insurance Corporation protection or guarantee by any bank. Investors bear the full credit risk of both GS Finance Corp. and The Goldman Sachs Group, Inc. in addition to the market risk linked to NVIDIA stock performance. This dual-risk structure means investors face both the possibility of issuer default and the impact of adverse NVIDIA stock movements on their returns, with no government backing or institutional safety net.

Contingent Coupon Calculation and Cumulative Payment Framework

The contingent quarterly coupon follows a cumulative accrual structure that investors must understand to assess total return potential. The disclosure specifies that on each coupon observation date when NVIDIA stock closes at or above the $101.405 downside threshold, investors receive a payment calculated as the product of $25.875 multiplied by the cumulative number of observation dates completed up to that point, minus all previously paid coupons. This formula means the payment amount increases with each successful observation date, creating a stepped coupon structure rather than a fixed quarterly rate.

To illustrate the calculation framework: if NVIDIA remains above the threshold through all twelve observation dates, the first coupon payment in October 2026 would equal $25.875 (one observation date × $25.875 minus zero prior payments). The second coupon payment in January 2027 would equal $51.75 (two dates × $25.875 minus the $25.875 already paid). By the final coupon observation in July 2029, cumulative accrued amounts would reach $310.50 ($25.875 × 12), though net payment would reflect prior distributions. However, the disclosure emphasizes that this entire coupon accumulation terminates immediately if NVIDIA stock falls below the threshold on any observation date, with no coupon payments made on that date or subsequently until the stock price recovers above the threshold.

Market-Making and Secondary Market Considerations

GS Finance Corp. disclosed that Goldman Sachs & Co. LLC and other Goldman Sachs affiliates may use this prospectus in market-making transactions after the initial offering period. The disclosure states that unless GS Finance Corp. or its agent informs purchasers otherwise, they should assume any subsequent transaction represents a market-making activity rather than a new primary offering. The securities will not list on any securities exchange or interdealer quotation system, meaning they trade only through over-the-counter market-making arrangements, primarily through Goldman Sachs.

The estimated secondary market value at pricing was approximately $966 per $1,000 principal amount, representing the bid-side valuation before customary bid-ask spreads. The disclosure indicates that Goldman Sachs would initially use this estimated value for account statement reporting and valuation purposes, with an additional $34 per $1,000 principal amount added to reflect market-making compensation. Investors should recognize that secondary market liquidity for these securities depends entirely on Goldman Sachs' willingness to make markets, which the disclosure explicitly states is not an obligation. Redemption or sale prior to maturity may be difficult or unavailable, and any such transaction would reflect current NVIDIA stock prices and volatility conditions, not the initial pricing estimates.

Investor Profile and Risk-Return Trade-Off Assessment

Goldman Sachs positioned these securities for investors seeking above-market coupon income in exchange for accepting significant downside capital risk. The disclosure characterizes the target investor as one willing to receive few or no contingent quarterly coupons and risk losing all or a portion of principal in pursuit of the structured coupon rate. The contingent coupon of $25.875 per $1,000 annually (if all observation dates meet the threshold) represents approximately 2.59 percent per annum on initial capital, which the disclosure describes as above current market rates at the time of issuance.

The risk-reward profile heavily emphasizes downside protection at 50 percent of the initial share price before principal begins declining. This means NVIDIA could fall by roughly 50 percent before investors experience principal losses, but any decline beyond that threshold triggers proportional capital erosion. The disclosure makes clear that investors sacrifice all upside participation in NVIDIA gains above the initial price in exchange for this cushion and income generation. For investors holding strong conviction in NVIDIA's near-term performance or moderate upside expectations, these securities may appeal as income enhancement vehicles, whereas investors expecting significant NVIDIA appreciation would forgo substantial gains through the capped return structure.

Regulatory Classification and Disclosure Framework

The disclosure was filed as a pricing supplement to registration statement number 333-284538 pursuant to Securities and Exchange Commission Rule 424(b)(2), indicating these are registered securities offered under an existing shelf registration. The pricing supplement number 25,861 places this offering within Goldman Sachs' ongoing series of structured equity-linked securities. The disclosure explicitly states that neither the SEC nor any other regulatory body has approved or disapproved the securities or evaluated the accuracy or adequacy of the prospectus, though neither such approval nor disapproval constitutes a criminal offense per the statutory language included in the document.

The filing reflects standard prospectus disclosure requirements for structured investments, including detailed risk factors covering credit risk, market risk, liquidity risk, and leverage risk as referenced but detailed separately in accompanying materials not contained in this excerpt. The disclosure emphasizes that investors should read the full documentation to understand all terms and risks comprehensively. The securities are subject to comprehensive prospectus supplement delivery requirements and trade confirmation disclosures that would accompany any purchase transaction, with additional terms and conditions governing the securities incorporated by reference from the general terms supplement accompanying the pricing supplement.