On Monday, Goldman Sachs reiterated its Conviction Buy rating on shares of NVIDIA Corporation (NASDAQ:NVDA), with a price target of $135.00. The firm anticipates NVIDIA's upcoming fiscal second-quarter results, which are scheduled to be released on August 28 after the market closes, to potentially increase investor confidence in the company's earnings power for the calendar year 2025.
Despite a reported delay in the release of NVIDIA's next-generation GPU architecture, known as Blackwell, Goldman Sachs expects that management commentary and upcoming supply-chain data may strengthen the outlook for NVIDIA's earnings.
The analyst noted that NVIDIA's competitive position in AI and accelerated computing remains strong, supported by robust demand from large Cloud Service Providers and enterprises. This demand is expected to drive NVIDIA's earnings, with Goldman Sachs projecting non-GAAP earnings per share (excluding stock-based compensation) to be $4.16 in 2025, which is 11% higher than the Street consensus.
Goldman Sachs highlighted that NVIDIA's stock is currently trading at 42 times the next twelve months (NTM) consensus earnings per share (EPS), representing a relative premium of only 46% compared to its past three-year median of 151%. The firm's updated Bull/Bear framework suggests a favorable risk/reward balance for NVIDIA's shares.
The firm's positive stance on NVIDIA is based on the belief that the company's earnings power and competitive edge in key growth areas will drive stock performance in the coming years. Investors are expected to pay close attention to NVIDIA's forthcoming quarterly results and management's insights for future growth prospects.
In other recent news, the technology sector, especially chip-maker Nvidia, has seen significant recovery, with the firm's shares surging by over 20%. This resurgence in the stock market is largely attributed to positive economic indicators such as retail sales, inflation, and producer prices. Analysts at Edward Jones and BNP Paribas (OTC:BNPQY) have expressed cautious optimism about the economic outlook, noting the positive direction of recent economic data.
The market's outlook on the Federal Reserve's monetary policy has also shifted, with traders reducing their bets on significant rate cuts in September. However, caution remains as the market approaches September, a historically volatile month. Upcoming events such as Nvidia's earnings report and an employment report are highly anticipated by investors.
In the realm of investment strategies, Soros Capital Management made significant changes to its portfolio, selling off its stakes in Microsoft (NASDAQ:MSFT) and Advanced Micro Devices (NASDAQ:AMD). Meanwhile, the Saudi Public Investment Fund increased its stake in Brazilian digital bank Nu Holdings Ltd.
South Korean retail investors, often referred to as "ants," continue to favor U.S. stocks over their domestic market, showing a strong preference for U.S. tech giants like Nvidia, Tesla (NASDAQ:TSLA), and Apple (NASDAQ:AAPL). These recent developments in the stock market and investment strategies provide valuable insights for investors worldwide.
InvestingPro Insights
As NVIDIA Corporation (NASDAQ:NVDA) prepares to release its fiscal second-quarter results, the InvestingPro platform offers a nuanced perspective on the company's financial health and market position. According to InvestingPro data, NVIDIA boasts a massive market capitalization of $3060 billion, reflecting its significant presence in the industry.
NVIDIA's revenue growth has been impressive, with a staggering 208.27% increase over the last twelve months as of Q1 2023. This growth is further highlighted by a quarterly revenue growth of 262.12% in Q1 2023, underscoring the company's robust performance despite market challenges.
InvestingPro Tips suggest that NVIDIA's stock has experienced a significant return over the last week, with a price total return of 14.27%, indicating strong investor confidence leading up to the earnings report. Furthermore, analysts anticipate sales growth in the current year, which aligns with Goldman Sachs' optimistic outlook for NVIDIA's earnings power. With a perfect Piotroski Score of 9, NVIDIA demonstrates solid financial health, which could further reassure investors about the company's stability and potential for continued growth.
For those seeking a deeper dive into NVIDIA's financials and market potential, InvestingPro offers an additional 20 tips, providing a comprehensive analysis of the company's performance and prospects. To explore these insights, visit InvestingPro's NVIDIA page for a detailed evaluation that could inform investment decisions.
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