Nvidia shares soar as Goldman Sachs predicts earnings boost from AI surge

Nvidia stock forecast per cent The shares of Nvidia Corporation's are poised to reach unprecedented levels following Goldman Sachs' optimistic adjustment to the chipmaker's price target. The revision reflects expectations of substantial earnings growth propelled by the ongoing artificial intelligence (AI) boom.

Pre-market surge

Nvidia's stock witnessed a 3.4 per cent surge in premarket trading, reaching $683.80. This surge is expected to contribute approximately $55 billion to Nvidia's market capitalisation, raising it to $1.63 trillion.

AI boom impact

Nvidia has become a symbol of the AI frenzy, experiencing a record monthly market value increase in January. The chipmaker is well-positioned to capitalise on the AI surge, contributing to its notable stock growth of 40 per cent year-to-date.

Goldman Sachs analyst Toshiya Hari raised the price target for Nvidia from $625 to $800, indicating a 21 per cent upside from current levels. Hari views Nvidia as the industry gold standard due to its robust hardware, software offerings, and continuous innovation pace.

Despite the impressive stock performance, Nvidia's shares trade at 31.4 times the company's forward earnings estimate, compared to the industry average of 22.9. The heightened valuation reflects Nvidia's leading position in the AI sector.

Goldman Sachs adjusted its full-year 2025-2026 earnings estimates for Nvidia, increasing them by an average of 22 per cent. The adjustment is attributed to signs of strong demand for AI servers and improvements in graphics processing unit (GPU) supply.

Goldman Sachs pointed to positive AI monetisation signals from major companies like Microsoft and Meta Platforms. Additionally, optimistic earnings projections from AI server maker Super Micro Computer contributed to the positive outlook.

While Nvidia has capitalised on the AI frenzy, chipmakers less involved in AI chip production, such as Intel, have seen their shares lag in performance. Nvidia is scheduled to report its fourth-quarter results on February 21. Analysts anticipate fourth-quarter earnings per share of $4.51 and revenue of $20.19 billion, according to LSEG data.

(With Reuters inputs.)