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On Thursday, Morgan Stanley (NYSE:MS) updated its financial outlook for NVIDIA Corporation (NASDAQ:NVDA), raising the price target from $160.00 to $170.00 while maintaining an Overweight rating on the stock. With a market capitalization of $3.29 trillion and an impressive revenue growth of 114.2% over the last twelve months, NVIDIA continues to demonstrate strong momentum. The revision reflects an increase in revenue estimates for the fiscal year 2026 (calendar year 2025), with expectations for year-over-year growth in fiscal years 2027 and 2028 to remain consistent at 33% and approximately 16.5%, respectively. According to InvestingPro data, the company maintains a perfect Piotroski Score of 9, indicating exceptional financial strength.
The firm’s analyst adjusted the revenue projection for the October quarter from $49.007 billion to $51.299 billion, and the non-GAAP EPS (earnings per share) estimate from $1.10 to $1.17. For fiscal year 2026, revenue and non-GAAP EPS forecasts were increased from $190.818 billion and $4.09 to $198.821 billion and $4.33, respectively. Furthermore, fiscal year 2027’s revenue estimate was raised to $264.648 billion from $252.890 billion, with non-GAAP EPS moving up to $6.28 from $6.01. InvestingPro analysis reveals that NVIDIA currently trades at a P/E ratio of 46.09, suggesting a premium valuation that reflects strong growth expectations. Get access to 18 additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.
The analyst expressed optimism about the company’s prospects, citing several factors supporting the positive outlook. The risks associated with direct shipments to China have been mitigated, and there is a potential to monetize at least some of the demand from the region. NVIDIA’s current gross profit margin stands at 75%, aligning with expectations. Customer feedback has also indicated a strong demand for NVIDIA’s new technologies, leaving room for growth in demand. The company’s financial health score of 3.75 (EXCELLENT) on InvestingPro supports this positive outlook, with particularly strong scores in profitability and growth metrics.
Morgan Stanley’s confidence in the durability of this demand has led to the belief that their estimates might be conservative, suggesting a high likelihood of further upward revisions. The new price target of $170 represents a 6% increase from the previous target, based on an unchanged target multiple of approximately 28 times the firm’s new mid-week EPS estimate of $6.02 ($6.28 non-GAAP). This multiple is a premium compared to the broader semiconductor industry but aligns with the valuations of large-cap AI semiconductor peers like AVGO, which trades at 29 times non-GAAP earnings. Based on InvestingPro’s Fair Value analysis, NVIDIA currently appears to be trading above its intrinsic value, reflecting the market’s high growth expectations for this semiconductor leader.
In other recent news, NVIDIA has reported notable financial performance and received varied assessments from analysts. The company exceeded expectations with April-quarter revenues of $44 billion, surpassing consensus estimates, despite facing a $2.5 billion revenue shortfall due to trade restrictions. For the upcoming July quarter, NVIDIA has set a revenue guidance of $45 billion, slightly below consensus but still surpassing some analysts’ forecasts, such as JPMorgan’s. Analysts from Stifel, Evercore ISI, and Citi have maintained positive ratings, with Stifel and Citi setting price targets of $180, and Evercore ISI assigning a target of $190.
Citi analysts highlighted NVIDIA’s strong sales and increased their price target from $150 to $180, while Deutsche Bank (ETR:DBKGn) raised their target from $125 to $145, maintaining a Hold rating. The ramp-up of NVIDIA’s Blackwell GPUs has been a significant contributor, generating $24 billion in revenue in the latest quarter. Data Center Networking and Gaming segments also saw substantial growth, with revenues rising significantly quarter-over-quarter. Analysts from Evercore ISI noted the ongoing demand for NVIDIA’s products, particularly in the AI ecosystem, reinforcing the company’s market position. Despite challenges, NVIDIA has maintained its fiscal year-end outlook, expecting recovery in gross margins and continued growth through 2026.
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