Morgan Stanley Has Strong Message For Nvidia Stock Investors

Nvidia NVDA is back at the top of Morgan Stanley’s semiconductor list, with the bank arguing that the chipmaker is still early in a major product cycle and could benefit from another leg of AI demand driven by agents, CPUs and rising token consumption. Shares rose about 1.5% in premarket trading following the call.

Morgan Stanley analysts led by Joseph Moore reiterated an Overweight rating and a $300 price target on Nvidia.

Nvidia remains very early in the ramp of a new product cycle, powered shell constraints play into Nvidia’s strengths, and recent agentic enthusiasm can accelerate Vera adoption, the analysts wrote.

The valuation also remains central to the bullish thesis.

Morgan Stanley MS said Nvidia trades at roughly 15 times fiscal 2028 earnings, leaving room for multiple expansion if enthusiasm around AI strengthens. But the bank argued the stock does not necessarily need a higher valuation multiple to work if earnings estimates continue rising.

The analysts also see AI agents increasing demand beyond GPUs.

Following meetings with Nvidia management, including CEO Jensen Huang, Morgan Stanley said agentic AI should lift CPU demand, although GPUs are still expected to capture the largest share of spending.

Nvidia expects its CPU business to grow from $20 billion in 2026 to $40 billion in 2027.

That said, the CPU shortage is intensethough we do not believe that it has intensified over the last monthand NVIDIA remains confident in its ramp of CPUs from $20 bn in 2026 to $40 bn…