Goldman Sachs revamps Nvidia stock forecast ahead of earnings

Analysts astatine the 157-year-old concern bank, regarded arsenic 1 of the champion connected Wall Street, judge the company's fiscal fourth-quarter gross volition travel successful astatine $67.3 billion. It besides expects Nvidia to outpace estimates connected the bottommost line.

"We expect Nvidia to present a ~$2bn gross bushed successful 4Q, and we basal 8% supra the Street for 1Q revenue," wrote the analysts successful a probe enactment shared with TheStreet. "Our 4Q and 1Q EPS estimates are 5% and 9% supra the Street."

The forecast is encouraging for investors, including maine (I've owned Nvidia since 2017, erstwhile spot request surged connected cryptocurrency mining). Nvidia's stock terms hasfallen 13% from its highest past fall.

Still, Goldman Sachs raised concerns that investors whitethorn already person priced successful a beardown quarterly result, shifting the absorption from caller show to Nvidia's guidance for 2026 and 2027.

In 2022, the motorboat of OpenAI's ChatGPT uncorked a flurry of AI chatbot development, kick-starting a monolithic surge successful request for Nvidia's high-powered, next-gen graphics processing units, oregon GPUs. It was a determination fewer saw coming, and galore investors chased the banal higher arsenic the institution delivered net beats and higher guidance 4th aft quarter.

Now, astir portfolios boast Nvidia, leaving acold little wealth connected the sidelines to thrust prices higher.

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"We judge upside to Nvidia's CY26 estimates is mostly priced into the banal astatine existent levels, and banal terms outperformance volition hinge connected gross visibility into CY27," wrote Goldman Sachs.

It whitethorn instrumentality much than conscionable higher gross and net past 4th to person investors to bargain more. They'll request to spot existent condemnation that request is locked successful for this year, and that the motorboat of its latest chip, Vera Rubin, goes disconnected without a hitch.

Several catalysts could thrust Nvidia shares higher, and Goldman Sachs thinks they warrant a $250 banal terms target, which is 35% supra the Feb. 6 closing price.

• Hyperscaler forecasts: Goldman Sachs was modeling that large information centers, known arsenic hyperscalers, would ramp superior expenditures (capex) to supra $527 billion, up from $394 cardinal successful 2025. That projection appears conservative, fixed caller net uncover $200 cardinal successful spending by Amazon and $185 cardinal from Alphabet (GOOGL) alone.

• Potential upside to Datacenter guidance: Nvidia has modeled $500bnin datacenter gross done 2026, but Goldman Sachs is, successful its words, "well supra the Street" estimates. It believes immoderate "visibility into 2027, and immoderate directional commentary connected this beforehand could beryllium a affirmative catalyst for the stock."

• Non-hyperscaler request trends: Nvidia shares could payment from a ramp successful GPU request from large-language exemplary companies specified arsenic OpenAI (ChatGPT) and Anthropic (Claude). OpenAI volition statesman ramping up aboriginal this year, but "initial signs of execution from OpenAI, and for commentary from Nvidia connected visibility into those deployments" would beryllium a positive. Goldman Sachs is likewise looking for penetration into stronger income to sovereign governments.

• Competitive trends versus ASIC and AMD: Anxiety astir undue reliance connected Nvidia led hyperscalers to spouse with Broadcom and Marvell Tech to make ASIC chips tailored for circumstantial AI tasks. Meanwhile, AMD MI455X is much competitive. If Nvidia leans into its competitory advantages, including its CUDA technology, it whitethorn reassure investors that it tin sidestep caller challengers.

• China demand: A fewer years ago, China accounted for much than 20% of Nvidia's revenue. Now it's little than fractional of that due to the fact that of restrictions. However, the U.S. yet greenlit income of Nvidia's H200 there, and Chinese officials person removed roadblocks. If Nvidia says affirmative things astir China request trends, it could thrust shares higher.

• Rubin ramp successful CY26: Nvidia is replacing its Blackwell spot lineup with the faster, much businesslike Rubin. At CES successful January, Nvidia said Rubin is successful production, with an expected ramp this year. Positive quality connected Rubin's advancement could enactment shares.