Nvidia shareholders are eagerly anticipating the AI-chip giant’s quarterly earnings results on February 25. The stakes are particularly high, given mounting competition from AMD and Broadcom, yet Goldman Sachs thinks Nvidia will deliver a $2 billion revenue surprise.
Analysts at the 157-year-old investment bank, regarded as one of the best on Wall Street, believe the company’s fiscal fourth-quarter revenue will come in at $67.3 billion. It also expects Nvidia to outpace estimates on the bottom line.
“We expect Nvidia to deliver a ~$2bn revenue beat in 4Q, and we stand 8% above the Street for 1Q revenue,” wrote the analysts in a research note shared with TheStreet. “Our 4Q and 1Q EPS estimates are 5% and 9% above the Street.”
The forecast is encouraging for investors, including me (I’ve owned Nvidia since 2017, when chip demand surged on cryptocurrency mining). Nvidia’s share price hasfallen 13% from its peak last fall.
Still, Goldman Sachs raised concerns that investors may already have priced in a strong quarterly result, shifting the focus from recent performance to Nvidia’s guidance for 2026 and 2027.
In 2022, the launch of OpenAI’s ChatGPT uncorked a flurry of AI chatbot development, kick-starting a massive surge in demand for Nvidia’s high-powered, next-gen graphics processing units, or GPUs. It was a move few saw coming, and many investors chased the stock higher as the company delivered earnings beats and higher guidance quarter after quarter.
Now, most portfolios boast Nvidia, leaving far less money on the sidelines to drive prices higher.
More Nvidia:
“We believe upside to Nvidia’s CY26 estimates is largely priced into the stock at current levels, and stock price outperformance will hinge on revenue visibility into CY27,” wrote Goldman Sachs.
It may take more than just higher revenue and earnings last quarter to convince investors to buy more. They’ll need to see real conviction that demand is locked in for this year, and that the launch of its latest chip, Vera Rubin, goes off without a hitch.
Several catalysts could drive Nvidia shares higher, and Goldman Sachs thinks they justify a $250 stock price target, which is 35% above the Feb. 6 closing price.
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Hyperscaler forecasts: Goldman Sachs was modeling that major data centers, known as hyperscalers, would ramp capital expenditures (capex) to above $527 billion, up from $394 billion in 2025. That projection appears conservative, given recent earnings reveal $200 billion in spending by Amazon and $185 billion from Alphabet (GOOGL) alone.
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Potential upside to Datacenter guidance: Nvidia has modeled $500bnin datacenter revenue through 2026, but Goldman Sachs is, in its words, “well above the Street” estimates. It believes any “visibility into 2027, and any directional commentary on this front could be a positive catalyst for the stock.”
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Non-hyperscaler demand trends:Â Nvidia shares could benefit from a ramp in GPU demand from large-language model companies such as OpenAI (ChatGPT) and Anthropic (Claude). OpenAI will begin ramping up later this year, but “initial signs of execution from OpenAI, and for commentary from Nvidia on visibility into those deployments” would be a positive. Goldman Sachs is similarly looking for insight into stronger sales to sovereign governments.
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Competitive trends versus ASIC and AMD: Anxiety about undue reliance on Nvidia led hyperscalers to partner with Broadcom and Marvell Tech to develop ASIC chips tailored for specific AI tasks. Meanwhile, AMD MI455X is more competitive. If Nvidia leans into its competitive advantages, including its CUDA technology, it may reassure investors that it can sidestep new challengers.
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China demand: A few years ago, China accounted for more than 20% of Nvidia’s revenue. Now it’s less than half of that because of restrictions. However, the U.S. finally greenlit sales of Nvidia’s H200 there, and Chinese officials have removed roadblocks. If Nvidia says positive things about China demand trends, it could drive shares higher.
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Rubin ramp in CY26: Nvidia is replacing its Blackwell chip lineup with the faster, more efficient Rubin. At CES in January, Nvidia said Rubin is in production, with an expected ramp this year. Positive news on Rubin’s progress could support shares.
