Regardless of the volatility, Morgan Stanley continues to be standing its floor on Nvidia (NVDA) inventory.
The large financial institution caught with an Obese ranking on the AI bellwether’s inventory, slapping a $250 value goal.
The recent goal implies an eye-popping 30% upside from Nvidia’s present value, hovering round $192.
In truth, the financial institution lays out a good loftier $330 bull case on sturdy execution and a $150 bear case if development cools off faster than anticipated.
It has clearly been a busy week for Nvidia, marked by China green-lighting first H200 chip imports and inspiring hyperscaler capex cues.
Consequently, because the final time I lined Nvidia inventory (on Jan. 22), it’s up practically 4% with its present market cap at a dizzying $4.68 trillion.
Nonetheless, Nvidia has its work reduce out this yr, however Morgan Stanley analysts really feel that the basics look largely intact.
Nevertheless, that conviction has but to be mirrored within the inventory market, for quite a lot of causes. Morgan Stanley believes Mr. Market continues to be fixated on the overhangs, which battle with their newest checks as we enter a brand new section of the relentless AI commerce.
Morgan Stanley updates its outlook on Nvidia because the AI commerce enters a brand new section
Picture by PATRICK T&interval; FALLON on Getty Photos
Vera Rubin is proof level that may reset the narrative
Morgan Stanley feels that Vera Rubin is the clearest manner for Nvidia to chop by means of all of the aggressive noise within the AI area.
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The financial institution expects a number of AI chipmakers to put up 75%+ development this yr, suggesting everybody’s gaining floor amid red-hot demand. Rubin, in Morgan Stanley’s view, is what brings readability.
For essentially the most half, comparisons primarily based on vendor specs oversimplify actuality. Till techniques are operating at scale, prospects can’t gauge the true price of possession.
That’s the place Rubin switches up the dialog, with Nvidia delivering total end-to-end techniques, not simply particular person chips.
As CEO, Jensen Huang put it at this yr’s CES occasion,
Morgan Stanley expects a considerably quicker-than-expected transition from Blackwell, on the again of superior manufacturability.
As an example, board meeting time is anticipated to drop to almost 5 minutes, in comparison with about two hours beforehand, paving the best way for a a lot smoother ramp into 2026.
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Vera Rubin versus Blackwell
- Blackwell is Nvidia’s present flagship AI platform, and Vera Rubin is its successor, tailored for faster and cheaper AI factories.
- Vera Rubin is anticipated to reduce inference token price by as much as 10 occasions versus Blackwell.
- For coaching, Nvidia says Rubin wants 4 occasions fewer GPUs than Blackwell, lowering racks, energy, and cooling necessities whereas delivering 5 occasions faster AI computing energy.
- Vera Rubin provides “context memory storage” in enabling chatbots to reply sooner to longer prompts and conversations.
Supply: Nvidia investor relations press launch
That explains Nvidia’s monstrous lead in AI chip gross sales (practically 85% share), and Rubin will assist considerably prolong it.
Associated: Historical past of Nvidia: Firm timeline and information
Massive Tech continues to be spending, and the numbers matter for Nvidia
Nvidia’s development engine is buzzing, and that’s unlikely to alter anytime quickly, given present hyperscaler capex patterns. Furthermore, for it to ‘win’, it simply wants these marginal {dollars} to observe into high-performance computing, and the latest numbers underscore that development.
For perspective, CreditSights estimates that the highest 5 hyperscalers will spend practically $602 billion in 2026, up 36% yr over yr. Additionally, Goldman Sachs factors to a wave of AI funding of $500 billion-plus this yr.
The latest proof level comes from Microsoft and Meta.
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For context, Microsoft simply reported a whopping $37.5 billion capex determinefor fiscal Q2 2026, up practically 66% year-over-year. Practically two-thirds of that spending is for chips and compute property
Meta’s outcomes echoed that very same development.
It guided 2026 capex to$115 billion to $135 billion, comfortably above Wall Avenue expectations of $110 billion and considerably larger than the $72.2 billion it reported in 2025.
For Nvidia, so long as these hyperscalers lean on compute-heavy builds, the tailwind will proceed powering their story.
Wall Avenue’s newest Nvidia value targets versus the present value
- Financial institution of America: $275 (+42.9%).
- Citi: $270 (+40.2%).
- Wells Fargo: $265 (+37.7%).
- J.P. Morgan: $250 (+29.9%).
- RBC Capital Markets: $240 (+24.7%).
The dangers that would reset Nvidia’s valuation
Morgan Stanley stays constructively bullish on Nvidia, but it surely additionally lays out a state of affairs the place issues might go improper.
In its bear-case state of affairs, Nvidia inventory might plummet to $150, on the again of sluggish development, aggressive pressures, and valuation compression.
Maybe the largest danger is demand normalization.
If AI spending cools sooner than anticipated and the demand/provide imbalance corrects rapidly, we might see a significant acceleration in development charges.
Competitors is one other crucial stress level.
Particularly, the dangers of customized silicon (ASICs) or a a lot stronger ramp-up from AMD will derail Nvidia’s pricing energy. Additionally, with AMD pushing its personal full-stack agenda with Helios, Nvidia clearly has its fingers full.
Financing optics additionally issues a ton.
Although Nvidia’s direct credit score publicity seems largely restricted, nervousness round shopper funding constructions can crush investor sentiment (who at the moment are in show-me mode with the AI commerce).
Throw in export restrictions, tariffs, or geopolitical friction, and issues might chunk much more, calling into query Nvidia’s lofty pricing multiples (at the moment 42-times ahead GAAP earnings).
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