Morgan Stanley Analyst Raises NVIDIA Stock Target Price Amid Expected Higher Earnings

Strong Demand and New Chip Generation

The AI frontrunner NVIDIA is currently developing its latest chip generation “Blackwell,” anticipated to hit the market later this year. According to “MarketWatch,” Morgan Stanley analyst Joseph Moore expects the first shipments of Blackwell chips to occur in the October quarter. Despite this, he does not foresee a decline in customer purchases and has accordingly raised his expectations for NVIDIA and its shares.

Continued Robust Demand for Hopper Chips

In an analysis on Monday, reported by “MarketWatch,” Moore indicated that while NVIDIA is nearing the end of its Hopper chip cycle, demand indicators for this generation remain strong. Both in China and Taiwan, the H100 and H200 chips from the Hopper generation are still in high demand, bolstering Moore’s confidence in short-term figures. “The significant surge in H2 models and demand alleviates any concerns about a pause before Blackwell,” Moore stated. He believes older products will continue to contribute significantly to NVIDIA’s revenue until early next year.

Customer Enthusiasm for Blackwell Chips

Moore also noted ongoing strong customer enthusiasm for the upcoming Blackwell chip, driven by its substantial increase in inference performance. The scaling up of NVIDIA’s supply also appears to be progressing well, though Moore’s contacts have reported challenges due to the exceptional complexity of Blackwell cards and racks.

Increased Target Price and Positive Outlook

Based on this data, Moore raised his target price for NVIDIA’s stock from $116 to $144 on Monday, maintaining his “Overweight” recommendation. “Considering the significant appreciation since the last earnings report, we are not overly aggressive at these levels. However, this remains the most compelling story in the AI semiconductor sector, and with the transition from H100 to H200 and then to Blackwell, visibility and order backlog will significantly improve,” Moore explained to “MarketWatch” in defense of his new target price, which is slightly lower than other analysts’ targets. For instance, Jefferies recently set their target for NVIDIA’s stock at $150. Moore pointed out that due to the substantial increase in market capitalization in recent weeks, the bar for NVIDIA is now much higher.

Following the release of the analysis, NVIDIA’s stock closed up 0.62% at $124.30 on the NASDAQ on Monday. This leaves about 16% potential upside to Moore’s target price. However, in after-hours trading on Monday, the stock slipped 1.16% to $122.86.

Higher Earnings Expected for NVIDIA

In addition to raising the target price, Moore also adjusted his earnings expectations for NVIDIA upwards. According to “InvestorPlace,” Moore’s new earnings estimate is $3.34 per share on a GAAP basis and $3.53 per share on an adjusted basis. Previously, his earnings expectations were $2.91 per share on a GAAP basis and $3.10 per share on an adjusted basis.