AI didn’t take weekends off in 2025, and neither did its poster child, Nvidia (NVDA) .
Case in point: its insane quarterly run, which has been nothing short of explosive.
It has been four consecutive quarters of earnings beats, underscoring its dominance in AI infrastructure. Revenue skyrocketed from $35 billion in FQ3 2025 to $46.7 billion in FQ2 2026, a massive 33% jump in just three quarters.
Each report comfortably topped Wall Street expectations, with EPS beats ranging from 4 to 6 cents and revenue surprises hitting as high as $1.9 billion. The incredible streak points to insatiable demand for Nvidia’s data-center GPUs, on the back of global AI build-outs by hyperscalers and tech giants.
The market has clearly noticed as well.
July’s $4 trillion milestone didn’t stand alone, since Nvidia soon touched the $4.5 trillion mark. Shares are up roughly 40% year-to-date, reinforcing a longer arc where it sits atop the S&P 500’s performance tables across the last 10, 15, and 20 years.
Into that momentum comes a fresh recalibration from Goldman Sachs. Arguably, the Street’s biggest bank is raising the bar, but this time it is sharpening the questions, too.
So if 2025 was about how big AI can potentially become, the next act is about how long the engine can run.
Image source: Bloomberg/Getty Images
Goldman Sachs lifts Nvidia target, warns of “circular revenue” risk
Goldman Sachs just bumped its price target on Nvidia higher to $210 from $200, maintaining a buy rating, as it expects the AI boom to continue powering more growth ahead.
That also implies about a 12% upside from its Oct. 3 close at $187.92.
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Analyst James Schneider said Nvidia’s growing network of AI partners is fueling demand for its ubiquitous GPUs.
He underscored the steady momentum heading into next year as next-gen Blackwell chips roll out and hyperscalers double down on AI infrastructure.
But the note wasn’t all cheerleading.
Schneider also warned of a potential risk of “circular revenue,” where Nvidia’s own investments in AI firms may come back as chip sales, which makes the top line appear stronger than it really is.
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Goldman’s warning about misleading top-line revenue mirrors past Big Tech patterns.
Think Microsoft’s funding of OpenAI, which is tied to exclusive Azure usage, or Amazon’s $4 billion stake in Anthropic, paired with AWS and Trainium commitments. Such partnerships can effectively inflate short-term sales by layering investment money back as sales.
Even so, Goldman Sachs keeps Nvidia at the center of the AI trade. Also, analysts see product cadence and ecosystem reach as critical long-term drivers.
Nvidia’s AI engine keeps powering higher
Nvidia comfortably sits at the center of the AI build-out.
Its iron grip isn’t just about chips; it’s the full stack, including GPUs, networking, and CUDA software, in which developers already live.
That powerful positioning is reinforced by its recent quarterly showing. In Q2 FY26, Nvidia posted a whopping $46.7 billion in sales, with $41.1 billion from Data Center, as Blackwell data-center sales jumped 17% sequentially.
Management also reiterated a healthy margin profile in the mid-70% range while adding $60 billion to buybacks, showing confidence as the product cycle ramps.
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Market structure tilts Nvidia’s way as well.
Estimates peg its AI-GPU share at over 90%, led by CUDA’s massive developer base and switching costs that limit migration to its peers.
Moreover, Citi now sizes AI infrastructure spending at an eye-popping $490 billion in 2026, backed by a multi-year runway through the decade.
Additionally, TrendForce expects 20%+ growth in AI-server shipments this year and states that Blackwell will account for 80%+ of Nvidia’s high-end shipments this year, highlighting the rapid platform transition supporting unit growth, even as prices normalize.
Nvidia takeaways
- Q2 FY26: Revenue hit $46.7 billion, with $41.1 billion from Data Center; Blackwell chip sales rose 17% quarter-over-quarter.
- Profitability: Gross margins guided to a superb mid-70% range.
- Market share: Nvidia controls roughly 90%+ of the AI GPU market.
- Industry outlook: Global AI capex projected to jump to $490 billion in 2026, with AI server shipments up over 20% in 2025.
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