--- title: "Goldman Sachs Review of NVIDIA Earnings: The Wave of AI Computing Capital Expenditure Has Not Yet Peaked" type: "News" locale: "en" url: "https://longbridge.com/en/news/287240735.md" description: "Goldman Sachs reviewed NVIDIA's earnings report, stating that the upward cycle of AI computing capital expenditure has not yet ended and the future growth path is clear. NVIDIA's Q2 revenue exceeded expectations, shareholder returns improved significantly, with the stock buyback authorization increased to $119 billion and the quarterly dividend raised from $0.01 to $0.25. Goldman Sachs maintained its \"Buy\" rating and raised the target price from $250 to $285" datetime: "2026-05-21T14:46:09.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287240735.md) - [en](https://longbridge.com/en/news/287240735.md) - [zh-HK](https://longbridge.com/zh-HK/news/287240735.md) --- # Goldman Sachs Review of NVIDIA Earnings: The Wave of AI Computing Capital Expenditure Has Not Yet Peaked NVIDIA delivered a strong quarterly performance: Q2 revenue guidance significantly exceeded market expectations, while the company announced a substantial increase in shareholder returns. In its earnings review, Goldman Sachs pointed out that **the key highlights of this report lie not only in the better-than-expected data but also in the improved sustainability of AI investments and the significantly enhanced strength of capital returns.** From Goldman Sachs' perspective, the upward cycle of AI computing capital expenditure is far from over, making NVIDIA's future growth path clearer and more predictable, thereby providing a more solid foundation for its stock price. **The core driver of this upward cycle is the virtuous economic cycle formed between NVIDIA and cloud providers.** NVIDIA continues to drive annual token cost reductions of over 70%, which means significantly compressed computing costs for cloud providers. However, the price of tokens sold externally by cloud providers has not followed suit; instead, it has stabilized, thereby significantly boosting their unit profits. **These substantial returns further support hyperscale cloud providers in continuously increasing their AI capital expenditures, bringing more sustained demand momentum to NVIDIA.** Furthermore, while promoting product innovation and ecosystem investment, NVIDIA places high importance on shareholder returns, significantly strengthening its capital return program: the stock buyback authorization was increased by $80 billion, adding to the remaining $39 billion, bringing the total authorization to $119 billion; the quarterly dividend was also substantially raised from $0.01 per share to $0.25 per share. Based on these judgments, **Goldman Sachs maintains its "Buy" rating on NVIDIA and raises its 12-month target price from $250 to $285.** ## Quarterly Report Broadly Beats Expectations, Data Center Business Leads **NVIDIA's core financial indicators for the first fiscal quarter all exceeded market expectations.** Data center business revenue reached $75.2 billion, higher than Goldman Sachs' forecast of $74.7 billion and the market expectation of $73.2 billion. Edge computing business revenue, which integrates former gaming, professional visualization, and other operations, amounted to $6.4 billion, exceeding Goldman Sachs' forecast of $5.4 billion and the market expectation of $5.6 billion by 13% to 18%. In terms of profitability, the gross margin was 75.0%, slightly higher than Goldman Sachs' expectation of 74.7%; the operating profit margin reached 65.9%, also exceeding Goldman Sachs' forecast of 65.4%. Non-GAAP earnings per share (EPS) were $1.87, approximately 5% to 6% higher than Goldman Sachs' forecast of $1.79 and the market expectation of $1.75. Operational efficiency metrics performed robustly. Inventory at the end of the first fiscal quarter was $25.8 billion, a 21% quarter-over-quarter increase, but days inventory outstanding remained flat at 115 days, indicating that inventory growth synchronized with business expansion. Accounts receivable were $40.7 billion, a 6% quarter-over-quarter increase, while days sales outstanding decreased by 6 days quarter-over-quarter to 45 days, reflecting improved collection efficiency. ## Q2 Guidance Beats Expectations, Full-Year Gross Margin Maintained in Mid-70% Range NVIDIA's Q2 revenue guidance also exceeded expectations. The company expects revenue to range between $89.2 billion and $91.8 billion, with a midpoint of $91.0 billion, representing a quarter-over-quarter growth of approximately 9.3% and a year-over-year growth rate of about 95%. The Non-GAAP gross margin guidance is 75.0%, broadly in line with Goldman Sachs' forecast of 74.8%. Based on this guidance, Goldman Sachs calculates the implied Non-GAAP EPS for Q2 to be approximately $2.06, higher than its previous forecast of $1.97 and the market expectation of $1.94. **Looking ahead to the full year, management expects the gross margin to remain in the mid-70% range.** Meanwhile, the company has increased its supply chain procurement authorization limit to $145 billion to ensure sufficient component supply supports capacity ramp-up. Regarding operating expenses, due to the significant upward revision in revenue forecasts, management raised the full-year FY27 operating expense growth expectation from the low 40% range to the high 40% range. ## Rubin Platform Accelerates Deployment, CPU Business Opens New Growth Pole Regarding the product roadmap, NVIDIA management stated that the Rubin platform will see strong volume ramp-up in the second half of the year, with initial revenue recognition starting in the third fiscal quarter (August to October). The company expects that, driven by rising capital expenditures from core hyperscale cloud providers and the cloud computing sector, better-than-expected standalone Vera CPU racks, and products such as LPX (Groq) and Rubin-CPX, the combined revenue of the Rubin and Blackwell platforms will surpass the previously predicted target of $1 trillion. Regarding the CPU business, management indicated that standalone CPU revenue this year is expected to reach at least $20 billion. Goldman Sachs believes that **this represents a strong initial ramp-up for NVIDIA's standalone CPU products, also confirming that structural CPU demand is rising as agent-based AI continues to diffuse.** ## Goldman Sachs Raises Target Price, CY27 Earnings Forecast Over 30% Higher Than Market Consensus Goldman Sachs raised NVIDIA's 12-month target price from $250 to $285, based on a P/E ratio of 30 times multiplied by normalized EPS of $9.50 (previously $8.25). At the current stock price of $223.47, the potential upside is approximately 27.5%, with Total Shareholder Return including dividends at about 28%. Regarding earnings forecasts, the EPS forecasts for FY27 to FY28 were raised by an average of approximately 6%, mainly reflecting higher revenue expectations and lower tax rate assumptions. Specifically, the EPS forecast for FY27 is $15.25, and for FY28 is $19.50, both exceeding the general market consensus by over 30%. Additionally, the report pointed out that **NVIDIA's Q2 guidance has positive transmission implications for the overall AI capital expenditure environment**, constituting the most positive signal for the digital semiconductor sector covered by the firm—including Broadcom, AMD, Marvell, and ARM. Risk Warning and Disclaimer The market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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