After spending several months stuck in the mud, Nvidia (NASDAQ:NVDA) stock has found its footing again, roaring back with a 28% rally since bottoming out in late March, with investors evidently feeling the stock’s time has come again.
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Trade NVDA with leverageThat growing optimism is setting the stage for the most closely watched earnings report of the season as Nvidia prepares to release its fiscal first quarter results on May 20.
According to Goldman Sachs analyst James Schneider, “expectations are elevated,” with confidence being driven by strong updates across the broader AI ecosystem. Encouraging supply-chain commentary from TSMC and SK hynix, combined with expanding 2026 capital spending plans from U.S. hyperscalers and bullish long-term AI demand commentary tied to 2027, have reinforced the view that Nvidia’s growth story remains far from over.
Schneider, who ranks among the top 3% of Street stock experts, anticipates a “beat-and-raise quarter,” supported by favorable supply and demand conditions, although the analyst thinks the “bar for stock outperformance is relatively high.” Even though the stock has underperformed its peers and now trades at a “meaningful discount” to historical valuation levels, for the multiple to re-rate, there needs to be evidence of several key drivers emerging.
These include potential upside to Nvidia’s $1 trillion datacenter revenue outlook outlined at GTC 2026, with investors looking for incremental contributions from products not included in that framework, such as Rubin Ultra, Vera CPU-only racks, and inference-optimized configurations like Rubin-CPX. Attention is also likely to center on updates to CPU demand driven by agentic AI, particularly as CPU-only racks begin shipping in 2H26.
“We are focused on management’s commentary on the adoption curve for agentic AI and CPU-based rack-level systems, its implications for accelerator market share, and the size of this opportunity for Nvidia in the medium term,” Schneider said on the matter.
Investors are also likely to focus on demand trends outside hyperscalers, including from customers such as OpenAI, Anthropic, and sovereign AI initiatives, alongside commentary on competition from custom ASICs. Schneider also expects the company to reiterate it is still the leader in delivering the lowest inference costs through its annual product cadence, supported by recent data indicating roughly a tenfold generation-over-generation cost improvement with Blackwell.
Finally, comments on the gross margin trajectory will be closely watched as Rubin ramps in the second half of the year, with Schneider expecting reaffirmation of mid-70% margins in CY2026.
So, where does that leave investors heading into earnings? Schneider remains bullish on NVDA, assigning the stock a Buy rating alongside a $250 price target that implies potential upside of 18% over the coming year. (To watch Schneider’s track record, click here)
Wall Street’s average price target sits higher at $274.38, pointing toward potential one-year gains of ~30%. On the rating front, based on 40 Buys vs. 1 Hold and Sell, each, the analyst consensus views this stock as a Strong Buy. (See NVDA stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.