Wall Street’s favorite AI chipmaker, Nvidia (NVDA) , faces a key earnings test later this month, and Goldman Sachs just recalibrated its expectations.
The reset comes at a time when investor sentiment has swung bullish, with hyperscaler spending and China market developments being a core focus.
Goldman Sachs’ analysts are flagging key levers that could potentially dictate Nvidia stock’s path ahead as it continues racking up even bigger gains.
Big expectations for Nvidia’s Q2
Nvidia is set to report its fiscal Q2 (July quarter) earnings after the closing bell on August 27, 2025, with big expectations in play.
Wall Street expects Nvidia to post a non-GAAP EPS of $1.00, GAAP EPS of $0.93, and revenue of $45.70 billion.
Related: Tesla just got its biggest break yet in the robotaxi wars with a key permit
These numbers represent a massive jump from last year’s $30.04 billion in revenue and $0.68 EPS. For perspective, Nvidia guided Q2 sales to around $45 billion, plus or minus 2%, factoring in lost sales from previously stalled H20 GPU shipments to China.
Here’s what investors will be watching in particular:
- Blackwell ramp: Investors will want the scoop on GB200/NVL systems rollout, particularly when customers will get their first units. They’ll also want to know how quickly the large rack-scale systems (NVL36/NVL72) are being adopted and whether there’s a positive impact on sales. These systems are bigger and attract higher average selling prices (ASP).
- China licensing: The U.S. greenlit H20/MI308 GPU sales to China, but will be taking a 15% cut of those sales. Investors will want to know how much China could add to sales in Q3 and beyond, and the impact on profit margins in Q2.
- Gross margins: After a large one-time charge linked to unsold H20 chips in the previous quarters, Nvidia’s adjusted gross margin was 71.3%. Management expects margins to claw back to the mid-70% range later this year, which makes their guidance all the more important.
- Networking: Q1 networking revenue came in at a superb $4.9 billion. Growth here could be a sign of broader adoption of GB200 systems and AI data center infrastructure.
- AI capex signals: Big tech remains relentless in its AI spending, with Google raising full-year capex to $85 billion, and Microsoft expecting $30 billion in Q3. Hence, any link to Nvidia’s order backlog will be critical.
- Software monetization: Updates on Nvidia’s AI Enterprise platform and NIM microservices, especially through Amazon’s AWS Marketplace, could offer more insights into a new recurring revenue engine.
So with the sentiment already sky-high, Nvidia will need to deliver a strong beat-and-raise quarter to keep the rally going.
Goldman lifts Nvidia price target as earnings loom
Goldman Sachs just gave a bullish nod to Nvidia heading into its fiscal Q2 results.
Analyst James Schneider raised his price target from $185 to $200, representing roughly a 9.5% potential upside from current levels while keeping a buy rating.
Schneider feels the investor sentiment is highly bullish, with most upbeat over upcoming results. This elevated optimism, though, sets a much higher bar for Nvidia’s second-half commentary and guidance to impress.
Related: Veteran analyst drops 6-word verdict on Apple’s $100 billion investment
Despite the tougher comps and sky-high expectations, Schneider expects a “clean beat-and-raise quarter.”
He feels Nvidia’s stock reaction will have everything to do with guidance exceeding expectations and whether sales to China are part of the estimates.
Schneider also raised Datacenter sales estimates by nearly 8% on average, citing stronger-than-expected hyperscaler spending and mid-quarter data showing robust AI demand.
Also, his Q2 and Q3 revenue projections of $41.9 billion and $51.5 billion are 2% and 8% above Mr. Market’s consensus, respectively.
He adds that with China sales back online, Nvidia could see an extra $20 billion in revenue and $0.40 in EPS by FY27.
In the near term, Schneider feels that investors will be keenly following how Blackwell chips ramp outside China.
Moreover, they’ll also be interested in how China sales might impact margins, and the direction of gross margins in the second half.
Looking further ahead, Schneider expects the market’s focus in late 2025 will shift toward the potential direction for 2027.
His FY27 EPS forecast is $6.75, and he believes much of 2026’s upside is already priced in, making future growth signals critical.
Nvidia’s rally fueled by a string of blowout quarters
Nvidia’s stock has been on quite the run this year, up roughly 54% in the past three months and almost 40% over the past six.
For the year, Nvidia stock is up an emphatic 72%, with its powerful momentum having everything to with its incredible earnings streak.
The company delivered 10 straight quarterly EPS beats, consistently beating revenue estimates as AI infrastructure demand continues to impress.
More News:
- Jim Cramer delivers straight talk on tricky S&P 500 market
- Bank of America drops shocking price target on hot weight-loss stock post-earnings
- JPMorgan drops 3-word verdict on Amazon stock post-earnings
In fiscal Q1 2026 (April 2025), Nvidia posted earnings of $0.81 per share, beating by $0.06, on sales of $44.06 billion (up 69% year-over-year).
Similarly, in fiscal Q4 2025, the company delivered $0.89 EPS (beat $0.04) on $39.33 billion (up 77.9% YOY), while fiscal Q3 2025 hit $0.81 on $35.08 billion (up 93.6% YOY).
The real momentum kicked off in mid-2023, with year-over-year sales surging at triple-digit growth rates. Also, even in softer markets, Nvidia blew past expectations.
Now, quarterly sales are more than seven times early-2023 levels, highlighting the sheer scale of its expansion.
Related: Surprising AI chip stock is up 90% in 30 days (and still climbing)
