To The Moon

Goldman Sachs has recently reaffirmed its buy rating for NVIDIA (NVDA), stating that despite the stock's significant rally over the past year, the current share price remains attractive from a valuation perspective. Analysts at the firm noted in a research report that NVIDIA's leading position in the AI chip market and sustained demand growth are not yet fully priced in by the market, presenting a favorable entry point for investors.

Goldman Sachs maintained its price target for NVIDIA at a recently adjusted level, believing the company's data center business and demand for AI-related products will continue to support its revenue growth. The report emphasized that NVIDIA's Hopper and Blackwell architecture products are becoming core components of global AI infrastructure, with the company not only maintaining dominance in training chips but also rapidly expanding its market share in inference. Goldman Sachs projects that NVIDIA's data center business revenue will exceed $120 billion in 2026, representing approximately 25% year-over-year growth.

Assessment of Current Valuation

Regarding valuation, Goldman Sachs pointed out that NVIDIA's current price-to-earnings ratio has retreated to the middle-to-lower end of its range over the past three years. Considering its competitive moat and growth prospects in the AI chip sector, this valuation is deemed appealing. Furthermore, despite recent market concerns about the sustainability of AI investments, Goldman Sachs believes AI infrastructure spending is still in its early stages, with enterprise-level AI applications yet to see widespread adoption, indicating ample room for future growth.

Market Reaction and Performance

Bolstered by this rating report, NVIDIA's stock rose about 1.5% in Monday's pre-market trading. Year-to-date, NVIDIA's share price has accumulated gains of roughly 45%, with its current market capitalization stabilizing above approximately $3.2 trillion.

Potential Risks to Consider

Goldman Sachs also reminded investors to be aware of potential risks, including intensifying competition in the AI chip market, supply chain uncertainties, and the potential impact of macroeconomic volatility on corporate IT spending. However, the report argues these factors are insufficient to alter NVIDIA's fundamentally positive long-term trajectory.

Upcoming Financial Milestone

NVIDIA plans to release its second-quarter earnings report in late August. The market will closely monitor the growth momentum of its data center business, the shipment progress of its Blackwell series products, and management's latest insights into the demand outlook for the coming quarters. As the AI wave continues to drive the industry, NVIDIA's status as a primary beneficiary remains a consensus view on Wall Street.