Key Takeaways
- Goldman Sachs maintains Buy rating with $250 price target for NVDA
- James Schneider forecasts another “beat-and-raise quarter” while noting elevated expectations
- NVDA shares up 28% from late March lows but remain undervalued versus historical multiples
- Critical watch points: datacenter sales, agentic AI momentum, CPU revenue, and margin trajectory
- Analyst consensus stands at Strong Buy with $274.38 average target
Shares of Nvidia have surged 28% from their late March trough, currently changing hands near $211.50. Ahead of the chipmaker’s fiscal first-quarter earnings scheduled for May 20, Goldman Sachs analyst James Schneider has reiterated his Buy recommendation along with a $250 price objective.
Schneider, whose track record places him in the top 3% among Wall Street professionals, anticipates another “beat-and-raise quarter.” His optimism stems from encouraging supply chain data points from TSMC and SK hynix, combined with expanded capital expenditure commitments from leading U.S. cloud infrastructure companies.
However, Schneider offers a balanced perspective on the near-term trading setup. He notes that “the bar for stock outperformance is relatively high” going into the earnings release. The shares have underperformed sector peers recently and are currently valued at a substantial discount compared to their historical trading range.
With a forward P/E ratio of 42.3 and a PEG ratio sitting at just 0.6, several Wall Street voices view the stock as attractively priced. Goldman Sachs has lifted its financial projections by approximately 12% across the board and now stands 14% and 34% above consensus estimates for fiscal years 2026 and 2027, respectively.
Datacenter Business Takes Center Stage
Among the most critical elements to monitor is Nvidia’s ambitious $1 trillion datacenter revenue projection unveiled at GTC 2026. Market participants will be searching for additional revenue streams from products not yet factored into that guidance.
These newer offerings encompass Rubin Ultra, Vera CPU-only rack systems, and inference-focused configurations such as Rubin-CPX. The CPU-dedicated racks are slated to commence shipments during the second half of 2026, introducing a fresh revenue category to the investment narrative.
Schneider is particularly attentive to management’s discussion around agentic AI deployment trends and their implications for CPU-based infrastructure systems. He identified this as a medium-term growth catalyst that could broaden Nvidia’s total addressable market significantly.
Margin Profile and Rivalry Dynamics
Profitability metrics will receive considerable scrutiny. As the Rubin platform accelerates production in the latter half of this year, Goldman Sachs anticipates Nvidia will confirm mid-70% gross margin guidance for calendar 2026.
While increasing component costs present a concern, recent analysis demonstrating approximately tenfold cost efficiency improvements per generation with Blackwell bolsters confidence in the margin outlook for the time being.
Regarding competitive threats, Schneider expects Nvidia to emphasize its leadership position in delivering the industry’s most economical inference solutions, supported by its rapid annual product refresh cycle. Competition from custom ASIC alternatives remains a subject investors are likely to explore during the earnings call.
Demand originating from non-hyperscale clients — including OpenAI, Anthropic, and sovereign AI initiatives — will also draw focus. These customer segments constitute a growing portion of the overall revenue composition.
Throughout the past twelve months, Nvidia has generated a 78% total return fueled by 65% revenue expansion. Goldman Sachs identifies positive estimate revisions and valuation multiple expansion as the primary catalysts for continued outperformance over the coming year.
The Street’s consensus price target sits at $274.38, suggesting approximately 30% upside potential from present levels. Among 42 analysts tracking the stock, 40 recommend Buy, alongside one Hold and one Sell rating — forming a Strong Buy consensus.
Nvidia is scheduled to release fiscal Q1 financial results on May 20.
