Goldman Sachs reaffirmed a bullish stance on Nvidia NVDA ahead of the company’s earnings release, scheduled for Aug. 28.
Despite some concerns about the timing of the Blackwell GPU launch, the investment bank remains confident in Nvidia’s long-term growth trajectory, particularly driven by strong demand from cloud service providers (CSPs) and enterprises for artificial intelligence.
In a note written Sunday by analyst Toshiya Hari, Goldman Sachs expects Nvidia’s data center segment to be the primary driver of earnings outperformance this quarter. Despite any transitory headwinds from the Blackwell delay, the bank anticipates robust sequential revenue growth in this segment, fueled by continued demand for Hopper-based GPUs (H100, H200, and H20).
Nvidia’s Networking business, particularly the ramp-up of its Ethernet-based Spectrum-X product, is expected to contribute significantly to revenue growth. The outlook for AI demand has improved, as evidenced by Taiwan Semiconductor Manufacturing Company TSM’s recent report of a 28% sequential increase in High-Performance Computing (HPC) revenue and Advanced Micro Devices Inc.‘s AMD revised full-year Data Center GPU revenue outlook, which has been raised to $4.5 billion.
The investment bank’s updated Bull/Bear framework suggests a favorable risk/reward balance, with Nvidia currently trading at a price-to-earnings (P/E) ratio of 42x next twelve months (NTM) consensus EPS, or 1% below its past three-year median.
Goldman Sachs’ Bullish & Bearish Scenarios For Nvidia
Looking beyond the immediate quarter, Goldman Sachs remains optimistic about Nvidia’s prospects in fiscal-year 2025.
The firm expects another year of double-digit revenue and earnings growth, driven by continued investments in AI infrastructure by major U.S. hyperscalers and enterprises. Despite ongoing debates about the monetization of AI and the potential impact on Nvidia’s customers’ future capital expenditures, Goldman Sachs believes Nvidia is well-positioned to defend its market leadership.
The bank’s 12-month price baseline target for Nvidia remains unchanged at $135, based on a 50x multiple of its normalized EPS estimate of $2.70.
Goldman Sachs outlines several potential scenarios for Nvidia’s stock price, depending heavily on the performance of its Data Center segment.
“We believe risk/reward on the stock is favorable with our most bullish scenario pointing to 89% potential upside vs. 61% potential downside under our most bearish scenario,” Hari wrote.
| Bear #2 | Bear #1 | Base | Bull #1 | Bull #2 | |
| Valuation | $49 | $92 | $135 | $176 | $236 |
| vs. current price | -61% | -26% | 8% | 41% | 89% |
| Data Center ($mn) | 69,483 | 111,865 | 154,247 | 188,297 | 222,347 |
| year-on-year (%) | -38% | 1% | 39% | 69% | 100% |
In a bullish scenario, where Data Center revenue grows by 69% in fiscal year 2025—significantly higher than the 39% growth in the baseline scenario—the stock’s valuation could soar to $176, representing a 41% increase from current levels.
The upside potential is even more striking if Data Center revenue doubles from 2024. In this scenario, Nvidia’s stock could reach $239, or 89% above its current price.
In a more bearish framework where Data Center revenue only minimally rises by 1%, the company’s price valuation would drop to $92—26% lower than current prices. The most extreme bearish scenario envisions a 38% year-on-year decline in Data Center revenue.
In this case, Nvidia’s share price could plummet 61% from current levels, reflecting severe market concerns over the sustainability of its AI-driven growth.
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