NVIDIA AI GPU dominance sees Goldman Sachs increase NVIDIA share price target by 28%

NVIDIA has been the fuel of the AI race since its inception, garnering an estimated 90% of the AI GPU market, and now Goldman Sachs has increased its share price target by a whopping 28%.

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NVIDIA will publish its earnings report later this month, and thanks to its absolute dominance in the AI business, the company could post a whopping report, says Goldman Sachs. NVIDIA has pushed out countless H100 Hopper AI GPUs, with beefed-up H200 AI GPUs coming soon, and next-gen B100 Blackwell AI GPUs are due in 2024, too.

Goldman Sachs says that not only is demand for AI GPUs and AI servers healthy, but the supply constraints that were hurting NVIDIA AI GPUs are now easing. The firm increased its share target for NVIDIA from $625 to a huge $800, representing a 28% increase, while also increasing NVIDIA's earnings per share estimates for the next few years.

Goldman Sachs explained: "We increase our FY2025/26 non-GAAP EPS estimates, on average, by 22% as we reflect recent industry data points indicative of robust AI server demand and improving GPU supply. We no longer assume a drop off in Data Center revenue in 2HCY24 and instead model consistent growth through 1HCY25 driven by continued spending on Gen AI infrastructure by the large cloud service providers, a broadening customer profile, and multiple new product cycles".

"We reiterate our Buy rating (also on the Conviction List) on NVDA with our updated 12-month price target of $800, pointing to 21% potential upside from current levels and our bull/bear analysis indicating an attractive risk/reward profile".