The Zhitong Finance App learned that Morgan Stanley announced in the latest research report released on November 11 that it will remove Nvidia (NVDA.US) from its research department's preferred stock list because the stock has accumulated a cumulative decline of more than 25% since it was listed as the preferred stock on October 2, triggering the bank's stop-loss policy for preferred stocks. However, Morgan Stanley stressed that this adjustment does not mean a change in its judgment on Nvidia's fundamentals or long-term growth prospects. The bank still maintains Nvidia's “Overweight” rating and a 12-month target price of $300.
Morgan Stanley analyst Joseph Moore and his team pointed out that despite continued pressure on Nvidia's recent stock price, artificial intelligence (AI) infrastructure construction is still in a strong and sustainable expansion phase. The bank believes that Nvidia's technological leadership in the field of AI computing has not wavered. As data center construction faces land, power and infrastructure restrictions, Nvidia is even expected to further expand its market share.
At the same time, Morgan Stanley also acknowledged that Nvidia is still facing some uncertainty in the short term. The bank specifically emphasized that CEO Wong In-hoon's leadership is critical to the company's strategic direction, but this has not changed its positive judgment on Nvidia's long-term investment value.
In terms of product competitiveness, Morgan Stanley expects Nvidia's next-generation Rubin architecture to be the leading solution for generative AI workloads. As demand for AI computing continues to exceed supply, Rubin and subsequent Rubin Ultra platforms are expected to help Nvidia continue its performance advantage and push the market to further raise the company's profit expectations.
Morgan Stanley believes that Nvidia's growth potential comes not only from AI chip demand, but also from its growing commercial value in data center system-level solutions. In addition, AI personal computers, autonomous driving, robotics, and software businesses may also become new growth drivers in the future.
In terms of valuation, Morgan Stanley maintains Nvidia's target price of $300. Compared to the closing price of $168.89 on November 10, this represents about 77.6% potential upside. The bank also gave an optimistic scenario valuation of $350 and a pessimistic scenario valuation of $160.
According to the research report's basic scenario forecast, Nvidia's 2026 and 2027 revenue is expected to increase by 88% and 70%, respectively. Morgan Stanley expects Nvidia's revenue to be around US$215.9 billion in 2026, further increasing to US$406 billion in 2027, and is expected to reach US$690.2 billion and US$97.2 billion in 2028 and 2029, respectively.
However, Morgan Stanley pointed out that Nvidia currently has a high market share and gross profit margin, which also means that there is relatively limited room for further expansion of its valuation multiples in the short term. The bank believes that Nvidia's valuation is roughly equivalent to the overall market, but there are still discounts compared to some computing chip peers.
Regarding potential risks, Morgan Stanley warns that if the supply of AI infrastructure grows faster than expected, causing the growth rate of data center demand to slow down significantly, or AI development costs drop drastically, competitors launch more competitive products, and large cloud computing customers accelerate the development of self-developed chips, all of which may challenge Nvidia's growth prospects. Furthermore, the uncertainties brought about by tariffs and export controls are also worth paying attention to.