Morgan Stanley’s love for Nvidia has not faded. The news Analysts at the firm reiterated Nvidia as their top pick in semiconductors following meetings with CEO Jensen Huang and other company executives. Morgan Stanley has a buy-equivalent rating on the Club stock and a price target of $150 a share, implying 13% upside from Wednesday’s close. “Every indication from management is that we are still early in a long-term AI investment cycle,” analysts wrote to clients Thursday. Morgan Stanley said it expects Nvidia’s already dominant share in the AI chip market to get even larger in 2025 due to adoption of its next-generation Blackwell platform. The reason: Tech giant customers, which also use custom-built AI processors, are seeing “very steep ramps” with Nvidia chips next year. Further out on the horizon, analysts said their meetings with Nvidia leaders have made them more upbeat on the company’s ability to benefit from day-to-day use of complex AI models like the newest one released by Microsoft -backed OpenAI. If artificial intelligence models are tasked with completing more complicated tasks, that could play into Nvidia’s hands over time, Morgan Stanley reasoned. NVDA YTD mountain Nvidia’s year-to-date stock performance. Big picture Morgan Stanley’s reinforced optimism on Nvidia follows a bounce-back rally in the stock that has pushed it within a few dollars of its all-time closing high set on June 18. Shares have soared more than 28% since Sept. 6 their most recent lows. The tech-heavy Nasdaq has gained about 9% over the same stretch. Nvidia rose more than 1% Thursday, bucking the flat broader market. Several positive updates on AI adoption last month helped Nvidia’s stock mount the comeback, which has completely erased a severe post-earnings slide that began Aug. 28 . Production of Blackwell chips has moved past initial hurdles — a brief concern for investors in August — and Nvidia’s order book for the chips is full for the next 12 months or so, Morgan Stanley said based on its conversation with executives. More recently, Nvidia CEO Jensen Huang has touted “insane” demand for Blackwell . The upcoming third-quarter earnings season from the largest U.S. tech companies, including Club holdings Google parent Alphabet and Microsoft, will provide an updated look at their plans on AI spending — with Nvidia usually receiving a large chunk of that money. Bottom line Morgan Stanley’s note — and the recent rally in Nvidia shares more broadly — demonstrates why Jim Cramer has bestowed his “own it, don’t trade it” designation on the stock. Apple is the only other stock with that title. The week-by-week swings in Nvidia can be tough to stomach if viewed exclusively through a short-term lens. The way to counteract that is by zooming out and staying focused on the multiyear opportunity, which still looks quite bright as AI adoption grows. Other chipmakers such as Advanced Micro Devices and Broadcom are also in the Club portfolio as AI plays, but Nvidia is the clear-cut leader and for that reason, it remains an essential stock to own. (Jim Cramer’s Charitable Trust is long NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Nvidia CEO Jensen Huang talks onstage with Salesforce CEO Marc Benioff during Salesforce’s Dreamforce on September 17, 2024 in San Francisco, California.
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Morgan Stanley’s love for Nvidia has not faded.
