Morgan Stanley lifts NVIDIA stock price target to $162

On Thursday, Morgan Stanley (NYSE:MS) updated its outlook on NVIDIA (NASDAQ:NVDA) stock, raising the price target to $162 from the previous $152, while maintaining an Overweight rating. The adjustment comes in light of NVIDIA’s recent performance and market prospects. According to InvestingPro data, analyst price targets for NVIDIA currently range from $120 to $220, with the stock trading near Fair Value levels based on comprehensive analysis.

NVIDIA has been recognized for its impressive growth, particularly in a transitional quarter marked by the integration of its Hopper products, which accounted for a significant portion of data center revenue. Despite facing challenges with the complexity of new Blackwell form factors, NVIDIA managed to achieve an 18% quarter-over-quarter growth and exceeded its guidance by nearly $2 billion. This level of performance is unprecedented in the semiconductor industry and highlights NVIDIA’s consistent ability to surpass expectations. With a remarkable revenue growth of 152% over the last twelve months and an industry-leading gross profit margin of 76%, NVIDIA demonstrates exceptional operational efficiency. InvestingPro analysis reveals the company has achieved a perfect Piotroski Score of 9, indicating strong financial health across all key metrics.

The company’s guidance also indicates strong growth prospects, with a return to positive discussions about the high demand for Blackwell products. Although there have been concerns about gross margin pressures, these are attributed to the GB200 challenges, which are reportedly improving according to checks conducted by Morgan Stanley. InvestingPro subscribers have access to over 15 additional exclusive insights about NVIDIA’s financial health, which currently rates as "GREAT" with an overall score of 3.55 out of 5.

The demand for Blackwell is expected to remain robust throughout the year, as evidenced by the commentary from earnings calls across various spenders and statements from key technologists. The trend of scaling inference workloads is gaining traction and, contrary to some concerns, does not seem to be negatively affecting training demands.

NVIDIA’s recent achievements and future potential underscore the company’s resilience and innovation in a competitive and complex market. The updated price target from Morgan Stanley reflects confidence in NVIDIA’s ongoing success and its ability to navigate the semiconductor landscape effectively.

In other recent news, NVIDIA has reported impressive financial results, with its fiscal fourth quarter sales reaching $39.3 billion, a 78% year-over-year increase, surpassing consensus estimates by 3%. The company has issued guidance for the first fiscal quarter at $43 billion, approximately $1 billion ahead of expectations, reflecting a 66% year-over-year increase. The Blackwell product line significantly contributed to these results, generating nearly $11 billion in sales, which exceeded the anticipated range. Analysts from BofA Securities, Piper Sandler, Evercore ISI, TD Cowen, and Oppenheimer have all maintained positive ratings on NVIDIA, highlighting its strong position in the AI market.

BofA Securities raised its price target to $200, citing NVIDIA’s commanding role in AI. Piper Sandler and TD Cowen both maintained a $175 price target, with Piper Sandler noting high demand for Blackwell and TD Cowen emphasizing the company’s strategic advantage in accelerated computing. Evercore ISI maintained a $190 target, underscoring NVIDIA’s successful ramp-up of the Blackwell processor. Oppenheimer also reaffirmed its $175 target, mentioning the transition to next-generation systems and the efficiency of Blackwell’s inference performance.

Despite some concerns over gross margins, which are projected to be around 71% due to increased production efforts, analysts expect margins to recover by the end of the year. NVIDIA’s ongoing expansion in data centers and AI, along with its technological advancements, continues to attract positive attention from analysts and investors alike.

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