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Goldman Sachs reiterates its Buy rating on Nvidia, saying the chipmaker’s risk-reward profile looks attractive after the recent AI-sector selloff. The brokerage expects near-term earnings to beat Wall Street estimates, despite concerns over AI infrastructure spending, data-centre power constraints and demand sustainability.
Goldman Sachs has reaffirmed its bullish stance on Nvidia, retaining a Buy rating and a $300 price target, arguing that the artificial intelligence (AI) chipmaker offers an attractive investment opportunity despite mounting concerns surrounding the AI industry and its leadership.
Goldman Sachs analyst James Schneider expects Nvidia’s near-term fundamentals to outperform Wall Street estimates, suggesting that the company’s earnings outlook remains resilient despite growing questions over the sustainability of the AI investment boom.
Nvidia shares are trading at approximately 11 times projected 2027 earnings, a valuation Goldman Sachs considers attractive given the company’s growth prospects.
The bullish assessment comes at a sensitive time for Nvidia CEO Jensen Huang, who is facing scrutiny following reports of a suspected foreign intelligence operation involving a Chinese businesswoman.
The controversy centres on Alice Huang, a former executive at Singapore-based Megaspeed International, an Nvidia business partner. The New York Times reported that US authorities suspected she was a Chinese intelligence asset who had developed a close relationship with Jensen Huang and allegedly passed information to Beijing.
Huang recently acknowledged being unfaithful to his wife in a message to Nvidia employees, taking responsibility for his actions and apologising to his family.
Nvidia’s board has since launched an independent investigation into whether its CEO was targeted by a foreign intelligence operation. The company said it had no reason to believe that US national security or its confidential information had been compromised. Huang has pledged to cooperate fully with the investigation. China has rejected the espionage allegations, calling them baseless.
More from BusinessThe controversy has raised questions about corporate governance, leadership stability and potential national security implications at the world’s most valuable chipmaker.
AI infrastructure concerns remain
Beyond the leadership controversy, investors are also grappling with fundamental questions about the AI boom.
Key concerns include the availability of electricity to support data-centre expansion through 2028, the financing of massive AI infrastructure investments and whether demand for AI computing capacity can sustain its current momentum.
These concerns have weighed on sentiment towards AI-linked stocks, triggering a broader selloff across the technology sector.
Goldman Sachs, however, believes Nvidia’s earnings potential and current valuation offer an attractive risk-reward opportunity, maintaining confidence in the chipmaker’s longer-term growth trajectory.
