Goldman Sachs Nvidia Preview: Beating Expectations is Consensually, Focused on Whether the USD 1 Trillion Guidance is Revised Upward

Nvidia is set to report its earnings after the market closes on Wednesday. Goldman Sachs maintains a buy rating and expects this quarter to achieve a combination of "surpassing expectations + raising guidance."

However, analysts also issue a caution: Beating earnings expectations is no longer enough to drive share prices higher. Investors are truly focused on how much incremental growth potential is hidden in Nvidia's sum of $1 trillion data center revenue guidance from the GTC conference, beyond what is already visible.

Goldman Sachs raises its earnings per share (EPS) estimates for Nvidia in CY26/27 by about 12% on average, which are currently 14% and 34% higher than the market consensus expectations, respectively. The 12-month target price remains at $250, implying approximately 20% upside from the current share price of $207.83.

Earnings Expectations: High Probability of Beating Estimates, but the Bar for Surprises Has Been Raised

On the supply side, the earnings data from TSMC and SK Hynix both point to a positive direction; on the demand side, the capital expenditure increase for 2026 by U.S. super large-scale cloud companies and their optimistic views for 2027 trends provide joint support for Nvidia's probability of surpassing expectations this quarter. But Goldman Sachs also warns that market expectations are at a high level, and beating earnings expectations alone will have a limited effect on share prices.

Specifically, Goldman Sachs estimates Nvidia's total revenue for the first fiscal quarter (FY1Q27) to be $800.46 billion, about 2% higher than the market consensus; EPS of $1.86, which is 7% higher than market expectations. The second quarter revenue forecast is $876.84 billion, 3% higher than market expectations; EPS of $2.05, which is 8% higher. Data center business remains the core driver, with expected revenues of $746.67 billion and $821.34 billion for the first and second fiscal quarters, respectively. In terms of gross margin, Goldman Sachs estimates 74.8% and 74.9% for the two quarters, respectively, slightly lower than market expectations, reflecting some pressure from rising raw material costs.

Core Focus One: Is There Room for Revisions to the $1 Trillion Guidance

Goldman Sachs believes that the most scrutinized topic on the earnings conference call will be whether there is room to revise the $1 trillion cumulative revenue guidance (covering Blackwell, Blackwell Ultra, and Rubin platforms from 2025 to 2027) given by Nvidia at the GTC 2026 conference.

Goldman Sachs points out that this guidance does not include several potential sources of incremental growth, including the Rubin Ultra launched in 2027, the Vera pure CPU racks from 2026 and beyond, and configurations such as Rubin-CPX and Groq 3 LPX, optimized for inference scenarios. Any positive statements beyond the existing guidance framework could trigger a reassessment of valuations.

For longer-term forecasts, Goldman Sachs raises its total revenue forecast for Nvidia in FY2027 to $3965.73 billion, 9% higher than the market consensus; FY2028 further rises to $6094.49 billion, 26% higher than market expectations; the forecast for FY2029 is $750.9 billion, 33% higher than market expectations.

Core Focus Two: Agentic AI opens a new growth curve for CPU business

Goldman Sachs sees the rise of Agentic AI as an important source of incremental growth for Nvidia's data center CPU business. With the demand for CPU computing power of Agentic AI workloads increasing rapidly, Nvidia's pure CPU rack products are expected to start shipping in the second half of 2026. This new category is expected to create a new growth curve independent of GPU accelerators. The market will closely monitor the management's latest judgment on the adoption curve of Agentic AI and the potential impact of CPU rack systems on Nvidia's overall accelerator market share.

Core Focus Three: Competitive Landscape and Gross Margin Pressure

In terms of competition, most super large-scale cloud companies are increasing their reliance on in-house chips. Goldman Sachs expects Nvidia's management to emphasize its leading advantage in inference costs and use about a 10x intergenerational cost improvement of the Blackwell platform compared to the previous generation as support. On gross margins, as component costs rise and the Rubin platform enters mass production in the second half, there may be some pressure, but the management is expected to reaffirm the guidance of maintaining a gross margin in the mid-range of 70%