Key Takeaways
- Goldman Sachs maintains Buy rating with $250 price target for NVDA
- James Schneider, top-ranked analyst, anticipates strong quarter but notes elevated expectations
- NVDA shares have surged 28% from late March lows, though valuation remains below historical averages
- Critical metrics to monitor: datacenter sales, agentic AI traction, CPU initiatives, and margin performance
- Analyst consensus stands at Strong Buy with $274.38 average target price
Shares of Nvidia have surged 28% from their late March trough, currently hovering 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 with a $250 price objective.
Schneider, who ranks among the top 3% of all Wall Street analysts, anticipates a quarter where Nvidia exceeds expectations and raises guidance. His optimism stems from encouraging supply chain data points from TSMC and SK hynix, combined with accelerating capital expenditure commitments from leading U.S. cloud infrastructure providers.
However, Schneider maintains a measured tone regarding near-term stock performance. He notes that “the bar for stock outperformance is relatively high” going into the earnings release. Despite recent gains, the stock has underperformed relative to sector peers and continues to trade at a valuation discount compared to its historical norms.
With a forward P/E ratio of 42.3 and a PEG ratio of merely 0.6, several market observers believe the shares are attractively priced. Goldman Sachs has increased its revenue and earnings projections by approximately 12% on average, positioning its 2026 and 2027 estimates 14% and 34% above the broader Street consensus, respectively.
Datacenter Business Under the Microscope
A primary area of investor scrutiny will be Nvidia’s ambitious $1 trillion datacenter revenue projection presented at GTC 2026. Market participants are eager to hear about additional revenue streams not yet factored into that comprehensive framework.
These incremental opportunities encompass Rubin Ultra, Vera CPU-only rack systems, and inference-focused configurations such as Rubin-CPX. The company expects to commence shipments of CPU-only racks during the second half of 2026, introducing a fresh growth vector to the investment narrative.
Schneider is particularly interested in management’s perspective on agentic AI deployment trends and their implications for CPU-based infrastructure solutions. He identifies this as a meaningful medium-term catalyst that could significantly broaden Nvidia’s total addressable market opportunity.
Margin Outlook and Competitive Dynamics
Gross margin trajectory will be another critical discussion point. As the Rubin architecture enters volume production in the latter half of this year, Goldman Sachs anticipates management will confirm mid-70% gross margin guidance for calendar 2026.
While rising component costs present a headwind, recent data indicating approximately a tenfold cost-per-performance improvement with the Blackwell generation versus prior architectures reinforces confidence in the margin outlook.
Regarding competitive positioning, Schneider expects Nvidia to emphasize its leadership in delivering the most cost-effective inference solutions, enabled by its disciplined annual product refresh cycle. The ongoing threat from custom ASIC alternatives will likely be addressed during the analyst Q&A session.
Demand dynamics from non-hyperscale customers—including entities like OpenAI, Anthropic, and various sovereign AI initiatives—will also command attention. This customer segment represents a growing and strategically important portion of the revenue composition.
Over the trailing twelve months, Nvidia has generated a 78% total return powered by 65% year-over-year revenue expansion. Goldman Sachs projects that continued upward estimate revisions and valuation multiple expansion will fuel additional outperformance through the next year.
The consensus price target among Wall Street analysts stands at $274.38, suggesting approximately 30% appreciation potential from current trading levels. Among 42 analysts providing coverage, 40 maintain Buy ratings, complemented by one Hold and one Sell recommendation—establishing a Strong Buy consensus.
Nvidia is scheduled to announce fiscal first-quarter results on May 20.
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