On Monday, Goldman Sachs reiterated their Conviction Buy rating on NVIDIA (NASDAQ:NVDA) with a steady price target of $135.00. Despite reports of potential delays in the release of NVIDIA's next-generation products due to design flaws, the firm remains optimistic about the company's long-term prospects.
The weekend brought news that NVIDIA's upcoming products built on the Blackwell architecture might face a delay of at least three months. The reported design issues could lead to some fluctuations in NVIDIA's short-term performance, particularly affecting growth in the coming October and January quarters. A sharper increase in product rollouts is anticipated thereafter.
Goldman Sachs expects these developments to have minimal or no effect on NVIDIA's earnings for the calendar year 2025. The firm's conviction in NVIDIA's enduring competitive edge in the market has not wavered. The $135 price target suggests a 26% potential upside, reflecting confidence in the company's future performance.
The analyst's comments underscore a belief that the reported delay, if confirmed, is unlikely to undermine NVIDIA's market position or financial outcomes significantly in the long run. The recommendation to maintain a Buy rating on NVIDIA's stock, which also features on the Americas Conviction List, is based on this long-term view.
Investors are keeping a close eye on NVIDIA as it navigates the reported challenges with its Blackwell architecture. The company's ability to address these issues and execute its product roadmap will be critical in maintaining its competitive stance in the technology sector.
In other recent news, Nvidia Corporation (NASDAQ:NVDA) is experiencing multiple challenges. The company is facing a delay in the launch of its new artificial intelligence (AI) chips due to design flaws, which could push the release back by at least three months.
This delay could have significant implications for major customers like Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOGL) Inc.'s Google (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT), which have placed orders worth tens of billions of dollars for these chips.
Additionally, Nvidia is under scrutiny by the U.S. Department of Justice for potential abuse of its market position in the AI chip industry. The investigation was initiated following allegations from rival chipmakers suggesting that Nvidia may have unfairly leveraged its market position.
InvestingPro Insights
With Goldman Sachs' strong conviction in NVIDIA's potential, investors may find additional context in the latest metrics and analysis from InvestingPro. NVIDIA boasts a perfect Piotroski Score of 9, indicating a healthy financial state, which may reassure investors about the company's ability to navigate short-term challenges. Analysts are also anticipating sales growth in the current year, suggesting that NVIDIA's fundamentals remain robust despite potential product delays.
InvestingPro Data highlights NVIDIA's impressive revenue growth, with a staggering 208.27% increase over the last twelve months as of Q1 2025. The company's gross profit margin stands at a solid 75.29%, underlining its efficiency and profitability. However, with a P/E ratio of 61.24, NVIDIA is trading at a high earnings multiple, which could indicate a premium valuation. Despite recent volatility, with a 1-month price total return of -14.75%, the stock has shown resilience over a longer period, with a 6-month price total return of 54.74%.
For investors seeking a deeper dive, InvestingPro offers additional tips on NVIDIA, including insights into the company's dividend consistency, debt levels, and profitability predictions for this year. To explore all 21 InvestingPro Tips for NVIDIA, including valuation multiples and stock price movements, visit InvestingPro.
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