Analyst Joseph Moore reinstated Nvidia as the firm’s top choice in the sector, replacing Micron Technology.
- Moore said that skepticism about how long Nvidia can sustain its rapid expansion has weighed on the shares.
- He believes those doubts may soon shift into optimism focused on the company’s longer-term earnings trajectory.
- The analyst said that Nvidia’s valuation now presents an attractive opportunity.
Morgan Stanley has once again named Nvidia as its leading semiconductor pick, signaling renewed confidence in the chipmaker after months of muted share performance despite continued operational gains.
Analyst Joseph Moore reinstated Nvidia Corp. (NVDA) as the firm’s top choice in the sector, replacing Micron Technology Inc. (MU), according to TheFly.
Why Morgan Stanley Is Bullish On Nvidia
The move comes after two quarters in which Nvidia’s stock price largely stalled even as its underlying business showed further improvement. Moore said that skepticism about how long Nvidia can sustain its rapid expansion has weighed on the shares.
However, he believes those doubts may soon shift into optimism focused on the company’s longer-term earnings trajectory, particularly expectations tied to fiscal 2027. Nvidia gave a strong forecast for its first-quarter (Q1) fiscal 2027, predicting revenue of about $78 billion, with a possible 2% variation, compared with analysts’ average estimate of $71.64 billion, according to Fiscal AI data.
Nvidia stock traded over 1% lower in Monday’s premarket. On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory amid ‘extremely high’ message volume levels.
Morgan Stanley: Valuations Seem Attractive
The analyst said that Nvidia’s valuation now presents an attractive opportunity. Shares currently trade at roughly 18 times projected 2027 earnings, a multiple Morgan Stanley views as compelling given the company’s dominant position in artificial intelligence chips and data center hardware.
The firm maintained its ‘Overweight’ rating on Nvidia and reiterated a $260 price target. The firm sees the current trading level as a "surprisingly good entry point" for investors seeking exposure to AI-driven semiconductor growth.
While discussing Nvidia’s earnings last week, Dan Ives, managing director at Wedbush Securities, said the company remains far ahead of its competitors in technology and the strength of its overall ecosystem. According to him, rivals trail by about three to four years, giving Nvidia a clear advantage as businesses and governments increase investment in AI-powered data centers.
NVDA stock has gained over 55% in the last 12 months.
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