According to Morgan Stanley Wealth Management, Nvidia is poised for even bigger gains at current prices. In a note published Thursday, the asset manager wrote that it had increased its position in the dominant maker of graphics processing units, or GPUs, used in artificial intelligence. Morgan Stanley Wealth Management currently has an overweight rating on Nvidia. Nvidia weathered the broader market sell-off and rose 3.7% on Thursday, extending this week’s gain to 8.4%. The recovery follows a loss of 14% last week. Despite falling 8% in the month of April, Nvidia has still managed to rise almost 67% this year, after more than tripling in 2023. Morgan Stanley Wealth Management’s price target of $1,000 implies that the stock will see another 21% could rise. Nvidia shares are selling at a “valuation in line with historic lows,” and its growth potential justifies a higher valuation, Morgan Stanley said. The bank sees Nvidia as a leader in the field of AI GPUs and points to its economies of scale and pricing power. “This multiple reflects a premium over other semiconductor peers, due to the expansion of all AI names and the team’s higher confidence in estimates given NVDA’s higher AI exposure,” the company wrote. Additionally, a growing AI tailwind could provide even more ammunition for Nvidia stock. “NVDA recently announced a new AI chip, and if demand exceeds supply, similar to what has happened over the past year for NVDA’s current AI chip, consensus gross margin expectations may be too low for FY25 and FY26,” wrote the asset manager. “NVDA should trade at a premium given the higher probability of upside [earnings] revisions in the near term.” – CNBC’s Michael Bloom contributed to this report.
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Morgan Stanley Wealth Management is buying the dip in Nvidia
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