Nvidia Corp. (NASDAQ:NVDA) delivered a blowout third-quarter earnings report after the bell on Wednesday, sharply beating Wall Street expectations and issuing bullish guidance that reaffirmed its dominance in the AI hardware space.
According to Benzinga Pro, the world’s biggest company posted revenue of $57.01 billion, surpassing the $54.88 billion Street consensus. At the same time, earnings per share came in at $1.30, topping expectations of $1.25 and marking a 60.5% year-over-year increase.
Gross margin stood at 73.6%, and operating income reached $37.75 billion, for an operating margin of 66.2% — both among the highest in the S&P 500.
But the story wasn't just about the beat. It was about what comes next.
"We believe Nvidia has a sustainable model advantage over peers in AI training applications," wrote Goldman Sachs analyst James Schneider, in a Thursday note, adding that the company addressed "several key investor questions" that had been pressuring the stock in recent weeks.
A Blistering Data Center Boom
The driver of Nvidia's growth was once again its Data Center segment, where revenue exploded to $51.2 billion, up 56% from last year and more than $1.5 billion above Street estimates, fueled by relentless AI demand.
According to Schneider, Nvidia's management provided evidence of upside to its prior $500 billion Data Center revenue outlook for 2025–2026. There's upside to that now.
“Nvidia sees potential upside to its prior Data Center revenue outlook of $500 bn in 2025/26," Schneider said.
And it's not just about chips anymore. Networking, which includes NVLink, SpectrumX and Infiniband, posted $8.2 billion in revenue, up 162% from last year. Customers driving that boom include Meta Platforms Inc. (NASDAQ:META), Microsoft Corp. (NASDAQ:MSFT), Oracle Corp. (NYSE:ORCL) and Elon Musk's xAI.
Guidance Points To More Stock Upside
Nvidia guided fourth-quarter revenue to $65 billion, well above Goldman's estimate of $63.2 billion and the Street's $62.4 billion.
Gross margin guidance was set at 75%, topping estimates, and implied EPS at $1.50 also exceeded expectations.
"Nvidia believes it can hold gross margins in the mid-70% range as higher pricing and other cost reductions offset these increased input costs," Schneider said.
“We see significant upside to Street estimates, and we view valuation as relatively appealing at current levels,” he added.
Goldman Sachs raised its 12-month price target from $240 to $250, reflecting greater conviction in the company's earnings power and margin resilience.
In the base case, Goldman Sachs expects Nvidia to continue commanding a 30x forward earnings multiple on its revised next-twelve-month EPS forecast of $8.25, resulting in a $250 price target and a 27.1% upside from current levels.
In the bull case, Goldman assumes stronger earnings leverage driven by faster-than-expected growth in AI infrastructure and greater share capture across data center workloads.
Under this scenario, Nvidia earns $9.50 per share, applies a 35x multiple, and reaches a $333 price target — implying nearly 70% upside.
In the bear case, the firm models a slowdown in AI capex, tighter competition, and some margin compression. With $5.80 in projected EPS and a more conservative 25x multiple, the price target drops to $145, representing a potential 26.3% downside.
Goldman also introduced long-term EPS projections for the first time, forecasting $15.60 in 2028, $18.65 in 2029, and $22.10 in 2030, suggesting the firm sees Nvidia's trajectory extending well beyond the current product cycle.
| Scenario | EPS | Multiple | Price Target | Upside/Downside |
|---|---|---|---|---|
| Base | $8.25 | 30x | $250 | +27.1% |
| Bull | $9.50 | 35x | $333 | +69.4% |
| Bear | $5.80 | 25x | $145 | -26.3% |
Image created using artificial intelligence via DALL-E.
