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 NVDA ahead of earnings.
In fact, the firm has a Buy rating on the company ahead of the earnings report on August 26, with Goldman believing NVDA could deliver another very strong quarter as demand for artificial intelligence continues to grow.
For one, the demand for NVIDIA’s chips is only growing.
Since the AI boom began in early 2023, market value has grown from about $360 billion to $5.4 trillion. Now, investors are waiting to see if NVDA can keep growing at such a fast pace.
What Goldman Sachs Is Watching
Goldman Sachs (NYSE: GS) says investors will be watching several important things during NVIDIA’s earnings report. One of the biggest topics will be the company’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 the company’s new Rubin products. They are expected to begin shipping their 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 the company believes Rubin could be an even bigger step forward.
According to the company, Rubin systems could allow companies to train AI models using 75% fewer GPUs than they need with Blackwell. The company 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, NVDA 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 the company another avenue for growth. 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.
The Bottom Line
NVIDIA’s earnings report will be closely watched by investors.
Goldman Sachs expects the company to have another strong quarter. Investors will be paying attention to NVIDIA’s revenue, profits, and future guidance. They will also want more information about the new Rubin chips and the company’s plans for its $500 billion financing platform.
NVIDIA has already benefited enormously from the AI boom. If AI demand continues to grow and Rubin performs as expected, the company could have another strong period of growth.
For now, Goldman Sachs remains confident and continues to rate NVDA a Buy.