NVIDIA Set to Exceed Market Expectations with Data Center Revenue Growth: Goldman Sachs Boosts Forecast

Goldman Sachs expects NVIDIA to exceed market expectations with its quarterly financial results, driven by increased capital expenditure from cloud service providers and robust AI spending. The firm has raised its forecast for NVIDIA's data center revenue by 8%, expecting $41.9 billion and $51.5 billion for Q2 and Q3. Goldman Sachs has revised NVIDIA's target price from $185 to $200 and maintains a "buy" rating.

NVIDIA Corporation (NVDA) shares surged 2% on July 2, 2025, following significant upward revisions in price targets by several major Wall Street firms ahead of the company's second-quarter earnings report. The positive outlook is driven by strong demand for AI infrastructure and NVIDIA's Blackwell platform, which is expected to boost the company's growth prospects.

Analysts at Morgan Stanley have raised their price target to $200, while Bank of America and Goldman Sachs have increased their targets to $220 and $200, respectively. These revisions reflect optimism about NVIDIA's ability to capitalize on the growing demand for AI infrastructure, particularly in data centers.

Goldman Sachs, in particular, has raised its target price from $185 to $200, maintaining a "buy" rating. The firm expects NVIDIA to exceed market expectations with its quarterly financial results, driven by increased capital expenditure from cloud service providers and robust AI spending. The firm has raised its forecast for NVIDIA's data center revenue by 8%, expecting $41.9 billion and $51.5 billion for Q2 and Q3, respectively [2].

NVIDIA's Blackwell platform, designed to deliver high-performance AI computing, is a key driver of the company's growth. The platform includes advanced reasoning models like gpt-oss, which generate exponentially more tokens and require significant computational resources. These models are optimized to run efficiently on NVIDIA's GPUs, including the new Blackwell Ultra GPUs, which offer up to 50 times better performance than the previous H100 chips [1].

The increasing adoption of AI across various industries, including healthcare and manufacturing, is fueling the demand for powerful AI hardware. According to NVIDIA CEO Jensen Huang, recent AI models consume up to 1,000 times more computational resources than earlier models, highlighting the need for advanced GPUs like those offered by NVIDIA [1].

Major tech companies, such as Alphabet, Meta, and Amazon, have significantly increased their AI infrastructure spending budgets for 2025. Alphabet raised its capital expenditure forecast from $75 billion to $85 billion, while Meta boosted its AI spending guidance from $64 billion to $66 billion. Amazon allocated $55.7 billion to capital expenditures in the first two quarters alone, with full-year AI spending potentially exceeding $118 billion [2].

NVIDIA's market dominance in the data center GPU market, with a 92% share, positions the company to capture a significant portion of this spending. The company's revenue guidance suggests Q2 fiscal 2026 sales reached approximately $45 billion, representing 50% growth compared to the same period last year [2].

The upcoming earnings report on August 27 will be closely watched by investors and analysts. Wall Street expects Nvidia to report earnings of around $1 per share for Q2 fiscal 2026, marking a 47% increase from the prior year period for NVDA stock [2]. Analysts will also be focusing on management's guidance for Q3 fiscal 2026, with revenue projections of $52 billion or higher expected to drive additional Nvidia stock gains.

NVIDIA's recent advancements in virtualization technology, such as the NVIDIA vGPU 19.0 release, also contribute to the company's growth prospects. The vGPU 19.0 release harnesses the capabilities of NVIDIA RTX PRO 6000 Blackwell GPUs and NVIDIA RTX PRO Servers to provide superior scalability and enhanced ROI for virtualized data centers [3].

In conclusion, NVIDIA's strong AI infrastructure demand and positive analyst targets indicate a promising outlook for the company's second-quarter earnings. The company's ability to capitalize on the growing AI market and its technological advancements position it well for continued growth.

References:
[1] https://blogs.nvidia.com/blog/openai-gpt-oss/
[2] https://www.ainvest.com/news/nvidia-stock-surges-earnings-analysts-raise-targets-ai-demand-2508/
[3] https://developer.nvidia.com/blog/nvidia-vgpu-19-0-enables-graphics-and-ai-virtualization-on-nvidia-blackwell-gpus/