Goldman Sachs has expressed confidence amid the recent turbulence in Nvidia’s stock. The tech giant experienced a significant dip last week, losing about $400 billion in market capitalization after its shares dropped nearly 10% in a single day. This decline pressure was part of the S&P 500’s worst start to September since 1953, yet Nvidia has shown signs of recovery recently.
Toshiya Hari, a lead analyst at Goldman Sachs, maintained a ‘Buy’ rating for Nvidia, asserting that the stock’s sharp sell-off is exaggerated. He stated, “Yes, we do believe the recent downturn is overdone.” Despite the company’s recent performance not meeting high expectations, Hari emphasized the continued robust demand for Nvidia’s accelerated computing solutions. He pointed out an expanding demand profile extending beyond major tech firms like Amazon, Google, and Microsoft, reaching into enterprise clients and even governmental agencies.
Nvidia’s stock swoon followed its earnings report on August 28, which surpassed Wall Street’s revenue projections by 4.1%. However, investors viewed this performance through a critical lens, interpreting it as the smallest margin compared to previous financial quarters. The ensuing debate centers on the sustainability of Nvidia’s earnings momentum through 2025 and into 2026—a concern that has left investors eager for concrete results rather than assurances regarding AI-driven revenue streams and profit margins.
Investor sentiment surrounding artificial intelligence has undergone a dramatic shift since the early part of 2023. Goldman’s equity research team noted a marked impatience among investors, who are now demanding demonstrable outcomes rather than projections related to AI advancements. Reflecting on this trend, Hari observed that significant technology shifts like AI warrant a focus on the long-term potential rather than short-term fluctuations in costs and returns.
Goldman Sachs predicts that generative AI will start to significantly contribute to industry growth by mid-2025, suggesting ongoing optimism around Nvidia’s position in the semiconductor landscape. Hari praised Nvidia’s competitive standing, stating, “We believe that Nvidia remains the leading choice in merchant silicon, particularly given their accelerated pace of innovation.”
As anticipation builds, Nvidia’s CEO Jensen Huang is scheduled to deliver remarks at the Goldman Sachs 2024 Communacopia and Technology Conference, offering further insights into the company’s future direction.
Nvidia’s stock trajectory remains a hot topic as market players continue to navigate the complex intersections of technology advancements and investor expectations. With its commitment to innovation and a strong demand trajectory, Nvidia could still be primed for recovery and growth in a rapidly evolving market landscape.