Morgan Stanley says Nvidia’s near-term growth story remains promising as demand for artificial intelligence processors continues. The Wall Street investment bank raised its price target to $750 from $603 and reiterated its overweight rating ahead of the dominant AI chip maker’s quarterly earnings release scheduled for February 21st. The new price target suggests an upside of about 10% from Nvidia’s current levels. The chipmaker has soared 211% in the past 12 months, including a 39% rise in the first six weeks of 2024. As Nvidia continues to rise, some investors are questioning whether profits will expand enough to justify the rally, especially amid reports about orders. If interest rates were cut at the end of last year and the rise in stock prices is sustainable. “We continue to have a very strong short-term outlook, and we continue to have a very strong near-term outlook, with a variety of secondary “We believe the derivatives anxiety is missing the bigger picture,” he wrote in a note Wednesday. “Demand for AI continues to skyrocket,” Moore said, adding that while stocks began this year trading below 25 times earnings, “this level has only been reached a few times in the past few years.” I’ve never seen it before,” he added. “General concerns about profit margins and reports of order reductions from major customers in November and December pushed down multiples,” Moore said. “We do not expect a situation like this to happen again anytime soon, as quarterly upside expectations could quickly turn into sustainability concerns once the numbers come in. NVIDIA remains in a strong position and is comfortable with the competitive dynamics of the chip market, according to Moore. The analyst was more cautious about his forecast for 2025, calling it a “tougher call.” “Longer term, the comments on cloud are encouraging, but we continue to budget for a plateau in 2025,” Moore said. Next year could see the consolidation of several large language model projects currently in development, he noted. —CNBC’s Michael Bloom contributed to this report.
