Goldman Sachs analysts raised their performance forecast for NVIDIA, predicting that revenue for the fourth fiscal quarter will reach $67.3 billion, with earnings per share (EPS) reaching $1.59, both significantly higher than market expectations.
Goldman Sachs stated that both the performance of NVIDIA's upstream supply chain and the expenditure data from downstream demand are strong enough to make investors optimistic about NVIDIA's profit outlook.
As six of the 'Magnificent Seven' U.S. stocks have already released their fourth-quarter earnings reports, many analysts on Wall Street are now focusing on$NVIDIA (NVDA.US)$NVIDIA, which will release its earnings report on February 25. This report is expected to be widely regarded as a key indicator of whether the global artificial intelligence boom can continue.
Currently, Goldman Sachs has high hopes for NVIDIA's performance. In their latest report, Goldman Sachs analysts raised their expectations for NVIDIA, predicting that the company will deliver another excellent set of results. Additionally, Goldman Sachs maintained its target price for NVIDIA at $250, implying a potential 35% increase from last Friday’s closing price.
Goldman Sachs expects NVIDIA to deliver another strong earnings report.
Goldman Sachs analyst Jim Schneider predicted that$NVIDIA (NVDA.US)$revenue for the fourth quarter of fiscal year 2026 will reach $67.3 billion, approximately $2 billion higher than the consensus market expectation. They also forecasted that NVIDIA’s EPS for the fourth quarter will reach $1.59, 5% higher than market expectations, and EPS for the first quarter of fiscal year 2027 will reach $1.80, 9% above market expectations.
Goldman Sachs analysts wrote in the report:
“Based on our communications, we believe market expectations are high. Given the strong performance of the supply side (Taiwan Semiconductor, SK Hynix) and demand-side data (increased capital expenditures by U.S. hyperscale data center operators in 2026), investors are optimistic about NVIDIA’s profit expectations.”
However, Goldman Sachs also cautioned that stronger-than-expected quarterly results may already be reflected in the stock price. They believe the investment focus has shifted from past performance to the company’s guidance for fiscal year 2027.
Goldman Sachs analysts wrote: “The stock price seems to have already factored in the possibility of an upward revision to NVIDIA’s fiscal 2026 earnings forecast. Future outperformance will depend on revenue visibility for fiscal year 2027.”
In other words, for investors, merely delivering strong results may not be sufficient for NVIDIA. Investors also need to see evidence of sustained strong demand for NVIDIA’s products into next year, along with plans for the smooth implementation of the next-generation chip platform.
Several Reasons for Optimism on NVIDIA's Prospects
In their report, Goldman Sachs carefully listed several major reasons for their$NVIDIA (NVDA.US)$positive outlook on NVIDIA:
1. Hyperscale data center spending: The bank forecasts that global hyperscale data center capital expenditures will increase from $394 billion in 2026 to over $527 billion. Considering Amazon’s ($200 billion) and Alphabet’s ($185 billion) recently announced spending plans, Goldman Sachs’ forecast may still have room for upward revision.
2. Positive outlook for the data center business: Although NVIDIA forecasts its data center business revenue will reach $500 billion by 2026, Goldman Sachs predicts this figure will not only far exceed NVIDIA’s expectations but also be 'significantly higher than Wall Street's.' Goldman Sachs expects that any positive commentary from NVIDIA executives regarding the 2027 earnings outlook could further boost NVIDIA’s stock price.
3. Demand beyond hyperscale data centers: The accelerating GPU demand from large language model companies such as OpenAI and Anthropic, as well as sovereign government contracts, presents a significant opportunity.
4. Wide and deep competitive moat: Amid intensifying competition from Google's TPUs, AMD's MI455X, and custom ASICs from Broadcom and Marvell, whether NVIDIA can leverage its CUDA software ecosystem to maintain its approximately 80-85% market share will be a critical point of focus.
5. Recovery of demand in China: According to the U.S. Federal Register, the easing of regulatory restrictions on the export of NVIDIA’s H200 chips to China could lead to a strong rebound in revenue from this key market, which once accounted for over 20% of total revenue, providing a powerful boost.
6. Transition to Rubin: The successful mass production of the new Rubin GPU platform, set to replace Blackwell later this year, will be crucial for sustaining growth momentum. At CES, NVIDIA announced that Rubin GPUs are already in production and mass production is scheduled to begin in the second half of 2026. Schneider expects the market to closely monitor the pace of Rubin’s mass production, with shipments anticipated to commence in the third quarter, leading to 'strong growth' in the fourth quarter and beyond.
Goldman Sachs also outlined its positive long-term growth projections for NVIDIA:
Fiscal Year 2026: Revenue of $215.1 billion / Earnings per share of $4.49
Fiscal Year 2027: Revenue of $382.9 billion / Earnings per share of $8.75
Fiscal Year 2028: Revenue of $513.0 billion / Earnings per share of $12.13
Goldman Sachs' current target price of $250 is based on the FY2027 EPS forecast of $87.50, calculated using a 30x price-to-earnings (P/E) ratio. If the same P/E ratio is applied to the FY2028 forecast, the potential future target price would be approximately $364.
Editor/Melody