Morgan Stanley said Nvidia is “putting digestion fears fully to rest” with accelerating growth beyond China headwinds, adding that the bear case is fading and “everything should get better from here.”

Nvidia (NVDA) stock shot up 6% in pre-market trade on Thursday after the company received a slew of price target hikes from Wall Street following its upbeat first-quarter earnings.

The AI bellwether reported adjusted earnings per share (EPS) of $0.81, beating analysts’ estimate of $0.75, as per Koyfin data. Its revenue came in at $44.05 billion, above the estimated $43.24 billion.

Nvidia forecasted about $45 billion in current-quarter sales, noting the figure would have been roughly $8 billion higher if not for export restrictions on H20 chips bound for China.

Melius Research provided the highest price target on Nvidia’s stock of $205, up from $150, with a ‘Buy’ rating on the shares. 

The brokerage said that Nvidia’s “momentum is back.”  It noted that second-quarter (Q2) guidance exceeded its forecast by as much as $3 billion, reflecting stronger demand from cloud and gaming customers for new Blackwell chips. 

Melius also expects gross margins to return to the mid-70% range by the second half of fiscal 2026, helping the company’s long-term earnings potential. 

Citi, Piper Sandler, and Bank of America (BofA) raised their price target on the stock to $180. According to Citi analysts, who kept a ‘Buy’ rating on the shares, Nvidia has cleared the China H20 ban overhang with its guidance raise. They expect expanding margins to push Nvidia shares to a new 52-week high. 

Barclays and Morgan Stanley raised their price targets to $170 and kept an ‘Overweight’ rating on the stock. According to Barclays, Nvidia has managed to continue sequential growth despite a $10 billion headwind to China in the April and July quarters. 

Meanwhile, Morgan Stanley contended that Nvidia is “putting digestion fears fully to rest” by showing an acceleration of the business outside of the China headwinds. It added that the bear case around Nvidia is fading and that “everything should get better from here.”

If pre-market gains hold, Nvidia’s stock will turn positive for the year. As of Wednesday’s close, the shares were down 0.87% year-to-date but remained up more than 22% over the past 12 months.

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