Goldman Sachs lifts NVIDIA shares on strong results

  • Investing.com
Goldman Sachs lifts NVIDIA shares on strong results

On Thursday, Goldman Sachs reaffirmed its positive stance on NVIDIA Corporation (NASDAQ: NVDA ) shares, raising the price target to $1,200 from $1,100 while retaining a Conviction Buy rating.

The adjustment follows NVIDIA's recent financial performance, which saw a significant year-over-year increase in Data Center revenue growth, jumping from 409% in the previous quarter to 427% in the first quarter of the fiscal year.

The financial institution's analysis highlighted NVIDIA's robust results, particularly in the Compute sector, which saw a 29% quarterly and 478% annual increase in revenue. This growth helped offset an unexpected drop in Networking revenue, which declined 5% from the previous quarter but still marked a substantial 242% year-over-year increase.

The report also addressed investor worries about a potential slowdown in Data Center revenue in the second half of 2024, which were alleviated by the company's earnings call the day before.

According to the analyst, the outlook for NVIDIA is bolstered by several upcoming product launches, including the H200, H20, B100, and GB200 in Compute, as well as Spectrum-X in Networking.

These new products, along with sustained demand for the H100 and anticipated supply constraints for the next-generation H200 and Blackwell products, especially the GB200, are expected to drive continued growth.

In light of these developments, Goldman Sachs has increased its non-GAAP earnings per share (EPS) estimates, excluding stock-based compensation (SBC), for fiscal years 2025, 2026, and 2027 by an average of 7%.

The revised price target of $1,200 represents a 19% potential upside from NVIDIA's after-hours stock price of $1,007. The firm's analysis underscores confidence in NVIDIA's sustained growth and product pipeline strength.

InvestingPro Insights

Recent data from InvestingPro underscores the optimism surrounding NVIDIA Corporation ( NASDAQ :NVDA), supporting the sentiment from Goldman Sachs' latest assessment. NVIDIA's robust financial health is evidenced by a staggering 125.85% revenue growth in the last twelve months as of Q4 2024, outpacing industry averages and reflecting the company's strong market position. With a gross profit margin of 72.72%, NVIDIA demonstrates exceptional profitability in its operations.

InvestingPro Tips highlight NVIDIA's status as a prominent player in the Semiconductors & Semiconductor Equipment industry, with a noteworthy 209.5% one-year price total return, which is a testament to its market performance and investor confidence. Additionally, NVIDIA's ability to maintain dividend payments for 13 consecutive years, despite its stock's volatility, offers a degree of stability for income-focused investors.

For those seeking more in-depth analysis and additional InvestingPro Tips, there are 21 more tips available for NVIDIA at https://www.investing.com/pro/NVDA. To enrich your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of financial insights and market data.

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