Wall Street’s enthusiasm for Nvidia (NASDAQ:NVDA) isn’t slowing down. The vast majority of analysts currently rate it as a “buy” and maintain bullish price targets. But one prominent financial institution just increased its bet on the artificial intelligence (AI) leader, seizing on the opportunity to acquire NVDA stock on a recent dip. Morgan Stanley (NYSE:MS) has staked an even bigger bet on the AI breakout sensation, which it currently maintains an “overweight” rating and $1,000 price target.
The investment bank noted that Nvidia’s pricing power and economies of scale were factors in its decision to double down on shares. “This multiple reflects a premium to other semiconductor peers, due to expansion in all AI names as well as the team’s higher conviction in estimates given NVDA’s higher AI exposure,” the investment bank stated in a recent note to investors. This news has provided a boost for both MS and NVDA stock.
Why Morgan Stanley Loves NVDA Stock
As noted, most of Wall Street is highly bullish on Nvidia. Out of 41 polled analysts, 39 maintain “buy” ratings and none rate it as a “sell.” Few stocks can boast such positive sentiment, but Nvidia has demonstrated the type of growth that’s hard not to marvel at.
Morgan Stanley doesn’t have the highest NVDA stock price target. But since the company recently increased its Nvidia position, its take is worth taking a closer look. As Fortune reports:
“Even after surging more than 200% in the past 12 months alone, Nvidia emerges as a potential big winner this earnings season, according to Morgan Stanley’s Joseph Moore. Moore has a buy-equivalent “overweight” rating on shares of Nvidia, and expects the stock to spike 21% to $1,000 over the next 12 months as it dominates its AI competition. “NVDA continues to see strong spending trends in AI, with upward revisions in demand from some of the newer customers such as Tesla and various sovereigns,” he wrote.”
Moore raised his price target early in April 2024, citing a likely increase in spending on Nvidia’s chips, an extremely important component of the AI revolution. NVDA stock is still down slightly for the month, but it has risen steadily over the past week and is in the green today.
Even while competition continues to mount throughout the AI sector, Nvidia remains the undisputed leader with a client list that only seems to be growing. Japanese conglomerate SoftBank Group (OTCMKTS:SFTBY) recently announced plans to start building out its own generative AI model, which it intends to do by purchasing chips from Nvidia.
This recent endorsement from Morgan Stanley is all Nvidia needs to keep growing. More and more companies are jumping on board the AI train by attempting to build their own models. In many cases, that means coming to Nvidia for essential components. NVDA stock is primed to continue rising in 2024 and push past Moore’s $1,000 price target.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
