NVIDIA has delivered a blockbuster quarterly report, and Goldman Sachs believes three key catalysts will keep propelling the stock ahead of the broader market.

The company posted fiscal second-quarter revenue of $96.2 billion, comfortably topping Wall Street expectations. Management also unveiled a full-year outlook calling for 70% revenue growth in calendar 2027, far exceeding Goldman's prior projection of 55% and the consensus estimate of 44%. In reaction, NVIDIA shares climbed roughly 4% in after-hours trading.

According to market sources, Goldman Sachs has reiterated its Buy rating on NVIDIA (NASDAQ: NVDA) and lifted its 12-month price target from $285 to $300, implying approximately 38% total return potential from current levels. The team led by analyst James Schneider views the 2027 revenue guidance as aligning with the most bullish buy-side expectations, while the clarified gross margin outlook and disclosure of customer-related financial commitments should provide a firmer foundation for the stock's valuation.

Quarterly results beat across the board, data center segment leads the charge

NVIDIA's second-quarter performance surpassed both Goldman's and consensus estimates. Revenue came in at $96.2 billion versus Goldman's $93.1 billion forecast and the market's $92.4 billion expectation, representing 106% year-over-year growth. Data center revenue reached $89 billion, ahead of Goldman's $86.5 billion projection, while edge computing revenue of $7.2 billion also exceeded both Goldman's and the market's $6.5 billion estimates.

Profitability proved equally resilient. Non-GAAP gross margin held at 75.0%, matching Goldman's projection and slightly above the market's 74.8% forecast. Operating margin of 66.5% modestly beat both Goldman and consensus expectations. Non-GAAP earnings per share of $2.22 came in above Goldman's $2.12 estimate and the market's $2.09 projection.

On the balance sheet front, inventory rose to $31.6 billion in the second quarter, up 22% sequentially, with inventory days climbing to 120 from 116 quarter-over-quarter, reflecting early stockpiling ahead of the Rubin product ramp in the third quarter. Accounts receivable surged 55% quarter-over-quarter to $63.1 billion, with days sales outstanding extending to 60 days, partly due to extended payment terms in purchasing agreements with certain large customers.

2027 guidance crushes expectations, Rubin ramp a major contributor

The quarter's most market-moving disclosure came from management's outlook for fiscal 2027 (calendar 2027). NVIDIA projects 70% revenue growth for that year, well above Goldman's prior 55% estimate and the consensus 44% forecast. Management also noted that underlying demand growth actually exceeds 100% absent supply constraints, with supply bottlenecks expected to continue limiting actual shipment volumes over the next 18 months.

Goldman estimates this guidance revision implies an additional $250 billion on top of NVIDIA's earlier cumulative revenue target of $1 trillion for Blackwell, Blackwell Ultra, and Rubin products spanning 2025 through 2027.

The Rubin product ramp is a key driver behind the raised guidance. Management expects Rubin shipments in the third quarter to contribute roughly 20% of projected revenue. Goldman believes the demand outlook reflects accelerating procurement from emerging customer segments including AI labs, neoclouds, and sovereign clients, rather than being limited to hyperscale cloud providers.

Additionally, NVIDIA's Vera CPU standalone rack is seeing robust demand, partly driven by agentic AI applications. The company maintained its calendar 2026 CPU-related revenue forecast of $20 billion and projects CPU shipment growth exceeding 100% in 2027.

Gross margin outlook clarified, Goldman calls it a 'clearing event' for valuation

Gross margin trajectory was one of the most closely watched topics heading into the quarter. NVIDIA guided third-quarter non-GAAP gross margin to 74.0%, below Goldman's and the market's expectations of approximately 74.9%, primarily pressured by higher HBM memory costs and the Rubin ramp.

Management further indicated gross margin would bottom in the fourth quarter within a 71% to 72% range, before recovering to a stable 72% to 73% band in fiscal 2027. That level sits below the market's prior 75.1% estimate for fiscal 2027, though Goldman views the guidance as broadly in line with expectations and potentially above some bearish scenarios.

Goldman stated explicitly in its report that given the market's heightened concerns over gross margin, the clarity provided should eliminate the most critical uncertainty and serve as a "clearing event" for the stock. The company also noted it has taken pricing actions to partially offset cost pressure from rising HBM memory prices.

Financial commitments disclosed transparently, capital return pledge reaffirmed

NVIDIA also provided detailed disclosure of its various financial commitments to customers. Management reported total commitments of $366 billion, encompassing supply and capacity commitments of $279 billion (primarily memory), cloud service agreements of $29 billion, data center leases of $25 billion, equity investments of $25 billion, and capital expenditures of $5 billion. Additionally, guarantees related to data center land, power, and infrastructure associated with SoftBank energy and AI cloud initiatives amount to a separate $108.5 billion.

Meanwhile, NVIDIA disclosed a $500 billion financing platform announced on August 10 with financial partners, designed to support AI lab, enterprise, and AI cloud infrastructure at competitive rates. NVIDIA may provide up to 25% residual value support mechanisms for specific projects, evaluated on a case-by-case basis.

Goldman believes these disclosures help investors more clearly assess the company's financial risk exposure, while management reaffirmed its commitment to return over 50% of excess free cash flow to shareholders, a pledge that remains sustainable even under downside scenarios.

Valuation and rating: price target raised to $300

Based on the earnings beat and guidance raise, Goldman has increased its fiscal 2027 and 2028 EPS estimates to $16.70 and $23.00 respectively, representing an average upward revision of approximately 9%, primarily reflecting a higher revenue base, partially offset by downward gross margin adjustments.

The price target has been lifted from $285 to $300, corresponding to 30 times earnings (multiple unchanged) applied to a normalized EPS estimate of $10.00, up from the prior $9.50. Goldman also outlines a bull case valuation of $424 (35x P/E, EPS of $12.10) and a bear case of $175 (25x P/E, EPS of $7.00).

Goldman notes that NVIDIA's third-quarter revenue guidance midpoint of $108 billion is below its own forecast of $110.7 billion but above the market's $104.6 billion expectation. The implied non-GAAP EPS of $2.43 exceeds the market's $2.32 forecast. Goldman believes this guidance also signals a generally healthy AI infrastructure spending environment, serving as a positive indicator for semiconductor coverage names including Broadcom, AMD, Marvell, ARM, and Intel.