Goldman Sachs Initiates Coverage on Nvidia with Buy Rating and $185 Price Target

Goldman Sachs analyst James Schneider initiated coverage on NVIDIA Corporation (NVDA) with a "Buy" rating and a price target of $185, citing the company's broadening customer base, product leadership, and attractive valuation as optimistic signals for the stock's medium-term performance. Schneider believes Nvidia is the biggest beneficiary of the ongoing AI infrastructure buildout.

Goldman Sachs analyst James Schneider recently initiated coverage on NVIDIA Corporation (NVDA) with a "Buy" rating and a price target of $185, citing the company's broadening customer base, product leadership, and attractive valuation as optimistic signals for the stock's medium-term performance. Schneider believes Nvidia is the biggest beneficiary of the ongoing AI infrastructure buildout.

Nvidia's recent surge in stock price has been driven by the booming AI chip market, which is projected to reach $563 billion by 2028, according to a Citi report [2]. The company's $4 trillion market capitalization reflects its dominance in the AI infrastructure sector, with a 7.3% weight in the S&P 500. Nvidia's GPUs, such as the H100 and A100, are the gold standard for training large language models, with major tech companies like Microsoft investing heavily in its technology.

The AI chip market's growth is being fueled by government investments in AI infrastructure, as noted by Citi analyst Atif Malik [2]. Nvidia's strategic partnerships with tech giants like Microsoft and Oracle further amplify its dominance, with Microsoft alone expected to generate $10 billion annually from its Azure cloud supercomputers by 2026.

Schneider's optimistic outlook is supported by Nvidia's strong financial performance. The company's Q1 2025 revenue surged 69% to $44.1 billion, with data center sales jumping 194% to $16.1 billion. The company's forward P/E ratio of 28x is below its five-year average of 34x, indicating that the stock is undervalued relative to its growth trajectory.

Despite near-term geopolitical risks, such as trade tensions with China, Nvidia's long-term prospects remain strong. The company's diversification into new markets and its ability to navigate geopolitical challenges position it well for sustained growth. Additionally, Nvidia's focus on long-term innovation, as demonstrated by its upcoming Blackwell chip, further solidifies its leadership in the AI chip market.

Investors should consider Nvidia as a core holding for long-term portfolios, given its unmatched market position, financial strength, and the insatiable demand for its technology. The AI revolution is here, and Nvidia is the company steering it.

References:
[1] https://www.ainvest.com/news/nvidia-4-trillion-valuation-ai-era-growth-engine-2507/
[2] https://m.economictimes.com/news/international/us/wall-street-veterans-and-analysts-set-bold-new-price-for-nvidia-is-it-headed-for-another-record-run-nvidia-stock-latest-news/articleshow/122389207.cms