There’s a long-running joke in the TV show “Silicon Valley” about what the point of a company is.
Is it to make money? Or is it to instead be valued as if maybe someday you’ll eventually make money? Or is it simply to get bought by a bigger company?
While you can’t really go wrong with any of those, financially speaking, the third option is growing in appeal as dealmaking activity explodes across Wall Street.
The latest example came on Monday with a $55 billion deal to take video game maker Electronic Arts private. It marks the biggest leveraged buyout in history, featuring the single biggest debt commitment ever from a bank for an LBO: $20 billion.
EA’s stock has spiked 20% in two days, dating back to last week when reports of the deal first came out. The move shows what the “Silicon Valley” braintrust knew to be true: getting acquired offers a nice short-term jolt for shareholders.
New data from Goldman Sachs shows that M&A activity has been accelerating, even before the colossal EA LBO:
The value of announced M&A is up 29% year over year
Announced M&A among strategic/sponsored acquirers (like PE firms) has surpassed $1 trillion in 2025, well above the 15-year average
The firm expects a 15% increase in completed M&A deals in 2026
Sold yet on the dealmaking renaissance? Ready to adjust your portfolio to capture some of those sweet M&A-related returns? There are three more considerations as you prepare to reallocate:
Know who’s facilitating the activity
Not all sectors are created equal when it comes to hitching their wagon to M&A. Goldman highlights the recent outperformance of bank and capital-markets stocks as a sign the market is already pricing in optimism around dealmaking.
If the words “priced in” turn you off, consider what Goldman sees as the likely next shoe to drop:
Related stories
Business Insider tells the innovative stories you want to know
Business Insider tells the innovative stories you want to know
Buy stocks in an overlooked area of dealmaking
The firm says alternative asset managers haven’t enjoyed the same degree of share-price success as their more mainstream peers — but that it expects that to change.
“If capital markets activity continues to increase, these stocks represent a potential ‘catch-up’ opportunity for investors,” the strategists said.
But there’s a catch: Goldman says the sector carries a historically elevated valuation, so investors should be selective. It recommends Carlyle Group, KKR, and TPG as top stock picks.
Buy the stocks of targets
The final way for investors to get quick exposure to explosive M&A activity is to buy stock in companies that are likely purchase candidates. Once a deal is announced — or even when rumors start to percolate — shares of targets have historically climbed.
If a premium is being paid, the stock price generally rises towards that level, with the spread indicating the market’s overall level of confidence in an eventual completion.
Just look at EA shareholders as inspiration, sitting on their 20% two-day gain.