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Nvidia Corporation (NVDA), the Silicon Valley sensation that began as a gaming chip maker in 1993, has transformed into the crown jewel of the artificial intelligence (AI) revolution. Once known for GPUs that powered gaming, Nvidia reimagined the potential of its technology, catapulting itself to the forefront of AI in the process.
Nvidia’s journey to a $3 trillion tech titan has been fueled by a streak of blockbuster earnings reports, with big positive surprises becoming the norm. With the company scheduled to report its fiscal Q2 earnings on Aug. 28, the question among some bulls seems to be not whether NVDA stock will beat estimates, but by how much.
Goldman Sachs (GS) strategist Scott Rubner, who previously nailed the short-term market top in July, made headlines last week when he called NVDA the "most important stock" of the year, advising investors to “buy the dip” ahead of what he expects will be an earnings report significant enough to spark a market-wide rally.
Separately, Goldman analyst Toshiya Hari recently backed a “Buy” rating on NVDA and reiterated a $135 price target on the stock ahead of earnings.
Although the semiconductor stock has attracted quite a bit of bullish brokerage attention heading into its quarterly results, the shares are still down about 12% from their June highs. So, is now the time to snap up NVDA on the dip? Let’s find out.
About Nvidia Stock
Santa Clara-based Nvidia Corporation (NVDA) reigns supreme in the semiconductor world, boasting a staggering $3.04 trillion market cap. Known for its blazing-fast GPUs that power gaming, data centers, and automotive tech, Nvidia continues to push boundaries.
With Project Groot for robots, an upgraded Isaac platform, and Jetson Thor, Nvidia is also flexing its AI and robotics muscles - but with a 95% market share in AI chips and data center GPUs, Nvidia remains the undisputed leader in this market.
NVDA stock was soaring above $1,000 before implementing a 10-for-1 stock split in June, largely to keep its shares accessible to retail investors. The chip stock has rallied an impressive 156.5% on a YTD basis and 22.4% over the past three months – crushing the S&P 500 Index’s ($SPX) returns over the same time frame, as well as the iShares Semiconductor ETF (SOXX).
Nvidia rewarded its shareholders with $7.8 billion in Q1 2025 through repurchases and dividends. With an 11-year streak of dividend payouts, the chip titan raised its dividend by 150%, paying out $0.10 per share to its shareholders on June 28. With its annualized dividend of $0.04 per share translating to a modest 0.03% forward dividend yield, Nvidia's 0.94% payout ratio reflects its primary focus on growth.
In terms of valuation, Nvidia stock trades at 50.11 times forward earnings - higher than the sector median of 23.75x, reflecting its powerhouse status. However, its price/earnings to growth (PEG) ratio of 1.33x is not only lower than the sector median of 1.94x, but also its historical average of 2.10x. This suggests that NVDA is still fairly priced, based on its projected earnings growth.
Nvidia’s Q1 Earnings Surge Past Wall Street’s Projections
Nvidia dazzled Wall Street in Q1 2025, continuing its streak of shattering expectations. The company’s revenue skyrocketed 262% annually to $26 billion and topped estimates by 6%, with the well-received report sending the shares up by 9.3% on May 23. Non-GAAP EPS soared 461.5% to $0.61, which also surpassed projections.
Nvidia’s AI-driven data center business surged 427% to $22.6 billion, fueled by strong demand for Hopper graphics processors, including the H100 GPU. Plus, net cash from operations hit $15.34 billion, a dramatic leap from $2.91 billion in the year-ago quarter. Nvidia closed the quarter with a $31.44 billion cash reserve, comfortably outpacing its debt.
For its upcoming fiscal Q2 report, scheduled for Aug. 28 after the market closes, the company expects $28 billion in revenue, plus or minus 2%. GAAP and non-GAAP gross margins are expected to be 74.8% and 75.5%, respectively, plus or minus 50 basis points.
Analysts following the stock are targeting Q2 EPS of $0.59, up 136% year over year, and the consensus Wall Street revenue forecast of $28.67 billion now hovers just above the midpoint of management’s own guidance.
What Do Analysts Expect for Nvidia Stock?
Goldman Sachs isn’t the only big brokerage name to weigh in bullishly on Nvidia ahead of earnings. Bank of America’s (BAC) Vivek Arya named Nvidia as a top “rebound” stock after its brief dip into bear market territory, and said that concerns about a slowdown in AI spending are overblown.
“Enterprise and sovereign AI adoption has yet to start in a big way,” wrote Arya in a note to clients, and added that Nvidia’s “flagship Blackwell AI product, best suited for AI, has not even started to ship yet.”
Analysts remain overwhelmingly upbeat about Nvidia, as the stock has a consensus “Strong Buy” rating overall. Out of the 39 analysts in coverage, 34 recommend a “Strong Buy,” two advise a “Moderate Buy,” and three analysts maintain a “Hold” rating.
The mean price target of $141.65 suggests an upside potential of 10.5% from the current price levels. The Street-high target price of $200 for Nvidia implies the stock could rally as much as 56.1%.
On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
