Nvidia Soars to New High Amid Goldman Sachs AI Optimism
Nvidia's stock price experienced a significant uptick, with premarket trading showing a rise of 3.4% to $683.80, potentially increasing the company's market capitalization by approximately $55 billion. This surge has propelled the company's shares to trade at 31.4 times the forward earnings estimate, surpassing the industry average of 22.9 times. The climb continued as shares reached a record high of $689.21, adding an estimated $70 billion to Nvidia's market capitalization, previously valued at $1.63 trillion. This escalation in value follows an optimistic assessment from Goldman Sachs, particularly from analyst Toshiya Hari, who projects Nvidia will maintain its leading position in the industry.
Goldman Sachs' confidence in Nvidia is rooted in the company's strong hardware and software capabilities, coupled with its rapid innovation, particularly in the AI space. The bank's positive outlook includes a substantial increase of 22% in its full-year 2025-2026 earnings estimates for Nvidia, citing robust AI server demand and an improved supply of GPUs. This financial institution's forecast suggests a shift in the computing landscape from general-purpose compute (CPUs) to accelerated computing (GPUs), which may lead to a reallocation of market share in Nvidia's favor.
The heightened expectations have led Goldman Sachs analyst Toshiya Hari to raise the price target on Nvidia's stock from $625 to $800, signaling a potential 21% gain from the previous closing price. Hari's forecast aligns with a 'buy' rating on the stock, anticipating the upcoming earnings report later in the month. The optimism is underscored by Nvidia's past performance, with shares climbing by 33.6% over the past year, significantly outperforming the S&P 500 and spearheading the AI rally in 2023.
