Cramer says Goldman Sachs had a 'drop-the-mic quarter,' sees shares going to $500

Published Fri, Oct 15 202110:48 AM EDTUpdated Fri, Oct 15 202111:35 AM EDT

CNBC's Jim Cramer said Friday that Goldman Sachs shares should be much higher given the financial powerhouse's blowout quarter on strong investment banking and trading results. "I really loved this quarter. I loved it," said Cramer, a Goldman alum himself. He called it a "drop-the-mic quarter" for retiring chief financial officer Stephen Scherr . Goldman Sachs jumped about 2.5% on Friday to above $400 per share, helping fuel a broader rally on Wall Street. The Dow Jones Industrial Average led the way, surging roughly 300 points , a day after breaking a four-session losing streak with a surge of 534 points, or about 1.6%. "You've got a company [in Goldman Sachs] that if you believe that traders are that good and they're that lean then you can argue that this company ... could go to $500 [per share]," Cramer said. That stock move over time would represent a 28% increase from Thursday's close. "The asset management is just gigantic. Look the market went up. The bears don't understand the self-fulfilling prophecy when the market goes up. The rich get richer," he added. Pointing out the boost Goldman Sachs got from mergers and acquisition activity in the quarter, Cramer also said, "These are not episodic numbers. It's entirely possible that there's just a new level of the way companies make money in this business." Goldman earned a much better-than-expected $14.93 per share in the third quarter. Revenue of $13.6 billion also crushed quarterly estimates. Here are some other highlights from Goldman's quarterly report: Investment banking revenue jumped 88% from a year earlier. Revenue in the bank's markets division climbed 23% The firm's consumer and wealth management division saw revenue 35% advance. Cramer said, "You know what also managed to be good: the Apple Card," which is issued by Goldman Sachs. "They're not losing the money that everyone told me they were going to lose," the "Mad Money" host added. "It's a great start to a credit card that's going to matter." It's not only Goldman Sachs. Bank earnings this week, which included quarterly reports from JPMorgan Chase , Bank of America and Morgan Stanley , have all been strong, defying estimates at each turn. Cramer called out analysts for being so wrong. "The estimates have nothing to do with what the companies [are] reporting. All anyone was talking about was the yield curve. But it meant nothing," he said, referring to what he suggested is the decreasing importance of bond yield fluctuations to big bank earnings. "The yield curve, that's a very backward way of looking at this," because the banks are so much more than lending nowadays, he added. Sign up here for the new CNBC Investing Club newsletter to follow Jim Cramer's every move in the market, delivered directly in your inbox.

A sign is displayed in the reception area of Goldman Sachs in Sydney, Australia.

David Gray | Reuters

CNBC's Jim Cramer said Friday that Goldman Sachs shares should be much higher given the financial powerhouse's blowout quarter on strong investment banking and trading results.