Goldman Sachs expects AI demand to remain strong, driving another big quarter.
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Goldman analysts led by Toshiya Hari expect Nvidia’s revenue and earnings per share to beat estimates, as the company’s fundamentals will support further upside.
Strength will come from the company’s strong data center revenue and operating leverage, Goldman said. Meanwhile, the bank noted that Nvidia hardware is still sought after by leading cloud computing services, and the company maintains its competitive edge in the AI computing sector.
For investors worried that AI spending hasn’t yet yielded meaningful results, Nvidia’s earnings should counter that narrative, Goldman said.
“We expect Nvidia management to provide ROI metrics available from specific customers on upcoming earnings calls as a way to instill confidence in investors,” Hari wrote.
However, investors should expect some immediate volatility, Hari wrote, given the Blackwell chip delay.
However, this will be a short-term hurdle, and Nvidia has no shortage of solutions. The impact will depend on three factors: the extent of the delay, whether customers are willing to use the old Hopper chips, and Nvidia’s ability to ramp up production of the simplified Blackwell model.
Goldman holds a “Buy” rating on Nvidia and a price target of $135 per share.