Nvidia(US:NVDA) Ge Long Hui·2025-10-08 03:18Core Insights - Goldman Sachs reports that NVIDIA's strategic investments and collaborations with companies like OpenAI have sparked discussions among investors regarding the nature of these transactions and the potential for NVIDIA's equity investments to be used for GPU purchases, creating a "recurring revenue" model for NVIDIA [1] - The report suggests that while the potential "recurring revenue" from these strategic investments may dilute NVIDIA's valuation multiples, the investments are strategically significant as they enhance NVIDIA's CUDA software ecosystem's market position among developers [1] - The transactions signal NVIDIA's perspective on the scale of market opportunities available [1] Financial Projections - Goldman Sachs sees significant upside potential for NVIDIA's 2026 earnings estimates and expresses satisfaction with the risk/reward profile, noting that "recurring" transactions will account for less than approximately 15% of projected revenues in 2027 [1] - The firm observes strong growth trajectories from core customers and potential upside from non-traditional customers, leading to an upward revision of the 2026 earnings forecast [1] - NVIDIA's rating is upgraded to "Buy," with the target price increased from $200 to $210, reflecting a projected price-to-earnings ratio of 35 times, and normalized earnings per share estimates are raised from $5.75 to $6 [1]