Keep an eye on Nvidia (NASDAQ: NVDA) as it heads into earnings later this month.
After all, strong results could be another substantial catalyst for the AI boom.
Helping to fuel upside, Goldman Sachs is still bullish on Nvidia ahead of earnings. In fact, the firm has a Buy rating on the company ahead of Nvidia’s report on August 26, with Goldman believing NVDA could have another very strong quarter because demand for artificial intelligence is still growing.
For one, the demand for Nvidia’s chips is only growing. Since the AI boom began in early 2023, Nvidia’s market value has grown from about $360 billion to $5.4 trillion. Now, investors are waiting to see if Nvidia can keep growing at such a fast pace.
What Goldman Sachs Is Watching
Goldman Sachs says investors will be watching several important things during Nvidia’s earnings report. One of the biggest topics will be Nvidia’s new $500 billion financing platform with partners. Investors want to understand how this plan could help Nvidia grow its business.
Another important topic will be Nvidia’s new Rubin products. Nvidia is expected to begin shipping its new Vera Rubin systems in the second half of this year. These systems will include new GPUs, CPUs and networking technology. The new chips are expected to be much more powerful and efficient than Nvidia’s older products.
Nvidia’s New Rubin Chips
Nvidia’s current Blackwell chips are already very powerful. They are used by companies that need large amounts of computing power for AI.
But Nvidia believes Rubin could be an even bigger step forward.
According to Nvidia, Rubin systems could allow companies to train AI models using 75% fewer GPUs than they need with Blackwell. Nvidia also says Rubin could reduce the cost of running AI systems by as much as 90%. That could be very important.
AI companies spend a lot of money on electricity and computer power. Every time an AI system answers a question, creates an image or writes computer code, it uses computing power.
This process is called inference. And if Rubin can make inference much cheaper, companies may be able to use AI more often without spending as much money.
In addition, Nvidia CEO Jensen Huang has said that major AI companies plan to use Rubin systems when they become available.
Nvidia Is Expected to Have Strong Earnings
During its last quarter, Nvidia reported $81.6 billion in revenue. That was an 85% increase from the same period a year earlier. The company’s data center business was especially strong. It brought in $75.2 billion, up 92% from the previous year.
Nvidia expects its next quarter to be even bigger.
The company has said it expects about $91 billion in revenue for its second quarter. That would be about 95% higher than the same quarter last year. Wall Street expects similar results. Analysts are currently expecting about $91.8 billion in revenue. They also expect Nvidia to report about $2.06 in earnings per share. That would be almost twice as much as the company earned during the same period last year.
We also have to consider that Nvidia is one of the biggest companies benefiting from that spending. The launch of Rubin could give Nvidia another way to grow. If the new chips can help companies run AI faster and at a lower cost, demand could increase even more. That is one reason Goldman Sachs remains bullish on the stock.
Sincerely,
Ian Cooper
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