Nvidia's Earnings Report: Goldman Sachs Sees Solid Quarter, But Stock May Still Dip

Nvidia is set to report its second-quarter earnings on August 26, and expectations are high. The company has consistently beaten estimates in recent quarters, but Goldman Sachs analyst James Schneider and his team believe there's a twist this time around.

According to Schneider, Nvidia's stock often drops the day after earnings, despite strong results. In fact, this has happened four times in a row. Furthermore, 52 out of 54 analysts covering the company rate it a buy, with an average price target of $308.01.

Goldman Sachs itself expects a solid quarter for Nvidia, with meaningful upside to guidance supported by tight GPU supply/demand trends. However, the analyst team also notes that the bar for the stock is elevated due to its recent 12% move in just two weeks.

The analysts reiterate their buy rating and price target of $285, which implies a big upside of 32.73%. They believe Nvidia trades at a steep discount to fair value and could continue to re-rate if certain conditions are met.