SKN | Goldman Sachs Resets Nvidia Forecast After Earnings, Keeps $250 Target

Key Takeaways

•  Goldman Sachs maintained a Buy rating on NVIDIA Corporation and kept its $250 price target unchanged following the company’s fiscal Q4 earnings.
•  The firm raised its earnings per share estimates by nearly 2% on average and increased forward revenue assumptions through 2028, citing continued strength in the data center segment.
•  Despite another significant earnings beat and strong forward guidance, Nvidia shares declined approximately 9% post-earnings, reflecting what has increasingly become a familiar pattern of short-term profit taking after results.

Earnings Beat and Estimate Revisions

Nvidia reported fiscal Q4 revenue of $68.13 billion, representing 73% year-over-year growth and surpassing consensus estimates of $66.21 billion. Non-GAAP earnings per share came in at $1.62, rising 82% year over year and exceeding expectations of $1.53, while GAAP EPS reached $1.76, up 98% year over year. For fiscal Q1 2027, Nvidia guided revenue to approximately $78.0 billion, plus or minus 2%, significantly above Street expectations near $72.78 billion. Gross margins remained elevated, with GAAP gross margin at 74.9% and non-GAAP at 75.0%, underscoring pricing power and operating leverage within its AI-driven product portfolio. Goldman Sachs characterized its upward revisions as forward-looking, reflecting confidence in sustained demand rather than a reaction to a single strong quarter.

Data Center Continues to Drive Growth

The Data Center segment generated $62.3 billion in revenue, up 75% year over year and 22% sequentially, accounting for roughly 91% of total company revenue in the quarter. This concentration highlights Nvidia’s dominant role in AI infrastructure buildouts. Professional Visualization revenue reached $1.3 billion, supported in part by demand linked to Blackwell architecture deployments. The scale of data center growth reinforces Nvidia’s position as a central beneficiary of global AI capital expenditure cycles, with hyperscalers and enterprise customers continuing to expand compute capacity.

Balance Sheet Strength and Capital Returns

Nvidia ended the quarter with $62.56 billion in cash, cash equivalents, and marketable securities, reflecting substantial liquidity flexibility. Free cash flow totaled $34.90 billion in Q4, more than doubling from the prior year’s level. The company repurchased $3.82 billion in shares during the quarter and returned $41.1 billion to shareholders across the full fiscal year through buybacks and dividends. This combination of strong earnings generation and aggressive capital return reinforces the company’s financial strength amid elevated investment in AI infrastructure.

Analyst Landscape and Outlook

Other major institutions remain constructive, with Bank of America and Citigroup holding $300 price targets, JPMorgan Chase at $265, and Morgan Stanley at $260. Goldman’s $250 target sits within this broader bullish range. While post-earnings pullbacks have become somewhat habitual for Nvidia, Goldman views the current reset as part of a broader recalibration toward the next phase of growth, with data center demand, gross margin durability, and AI adoption trends remaining central to the thesis.

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