Yahoo Finance·2026-02-08 18:45Core Viewpoint - Nvidia is expected to report strong quarterly earnings, with Goldman Sachs predicting a revenue surprise of approximately $2 billion, driven by high demand for AI chips despite increasing competition from AMD and Broadcom [1][2]. Financial Performance - Analysts forecast Nvidia's fiscal fourth-quarter revenue to reach $67.3 billion, which is 8% above market expectations for the first quarter [1][2]. - Goldman Sachs estimates that Nvidia's earnings per share (EPS) for the fourth and first quarters will exceed market expectations by 5% and 9%, respectively [2]. Market Sentiment - There are concerns that the strong quarterly results may already be priced into Nvidia's stock, shifting investor focus to the company's guidance for 2026 and 2027 [3]. - Nvidia's share price has decreased by 13% from its peak last fall, indicating potential investor caution [2]. Industry Dynamics - The demand for Nvidia's GPUs surged following the launch of OpenAI's ChatGPT in 2022, leading to significant earnings beats and higher guidance [4]. - Most investment portfolios now include Nvidia, resulting in less capital available to drive prices higher [4]. Future Outlook - Goldman Sachs believes that the upside potential for Nvidia's estimates for 2026 is largely reflected in the current stock price, and future stock performance will depend on revenue visibility for 2027 [5]. - The firm has set a stock price target of $250 for Nvidia, representing a 35% upside from the closing price on February 6 [6]. Catalysts for Growth - Major data centers, or hyperscalers, are projected to increase capital expenditures to over $527 billion, up from $394 billion in 2025, which could benefit Nvidia [7]. - Nvidia's datacenter revenue guidance of $500 billion through 2026 is considered conservative by Goldman Sachs, which anticipates positive catalysts from visibility into 2027 [9]. - Demand from large-language model companies like OpenAI and Anthropic is expected to ramp up, with initial signs of execution from OpenAI being a positive indicator [9]. - Nvidia's competitive position may be bolstered by its CUDA technology, which could help mitigate competition from ASIC chips developed by Broadcom and Marvell Tech, as well as AMD's MI455X [9]. - Recent easing of restrictions in China could lead to a resurgence in demand, which previously accounted for over 20% of Nvidia's revenue [9]. - The launch of Nvidia's new chip, Rubin, is anticipated to enhance performance and efficiency, with production already underway [9].