Morgan Stanley Advocates Resuming Purchase of Nvidia Shares
Headline: Nvidia Stock Drops Dramatically, But Morgan Stanley's Optimism Indicates a Potential Turnaround
The Nvidia stock has experienced a significant drop of around 17% since the new year started. This unexpected slump comes despite Nvidia's status as the leading provider of AI hardware. Some factors contributing to the stock's pressure include geopolitical tensions, Donald Trump's trade tariffs, and rising AI competition from China.
However, the company's operations still appear strong. And after an analysis by US investment bank Morgan Stanley, reported by financial portal "TipRanks", investors have reasons to be optimistic once more.
GTC 2025: Nvidia Impresses Despite Lukewarm Reaction
The presentations at the GTC 2025 conference initially didn't boost the Nvidia stock. According to Morgan Stanley analyst Joseph Moore, this was primarily due to heightened market expectations, not any apparent weaknesses. On the contrary, Moore described the event as "one of the most impressive GTCs" observed by the team.
CEO Jensen Huang presented with confidence and outlined a clear strategy for expanding Nvidia's dominance in AI training and inference. A highlight of the conference was the unveiling of the new Blackwell graphics processors. Nvidia provided specific numbers for the first time: 3.6 million units had already been supplied to the four largest US cloud providers. Morgan Stanley considers this transparency as a strategic signal to reinforce strong demand and restore market confidence.
Moore also points out that despite high investments, Nvidia is struggling to keep up with production. The discussion around efficiency should be looked at less critically – in the long run, it could even drive increased demand.
Morgan Stanley Bullish on Nvidia, Predicts 38% Upside Potential
Morgan Stanley rates the stock as "Overweight" and sets a price target of $162, which translates to a potential upside of 38%. This makes the bank one of the more moderate optimists. The average price target for those analysts recommending buying Nvidia is $177, equating to a potential increase of around 50%.
Analyst Moore remains optimistic despite macroeconomic risks like an economic slowdown or trade wars. He believes Nvidia is poised for a new growth phase, and investors would be wise to enter now.
Short-term risks such as export restrictions, political uncertainties, or economic fluctuations remain. However, those who have a long-term outlook will see: Nvidia is a key player in the global AI surge.
With the new Blackwell chips, a strong position in the data center market, and unwavering demand, Nvidia offers significant long-term potential. Patient investors could capitalize on the current price dip – Nvidia remains a buy.
Alternative Investment Option: Consider the Artificial Intelligence Index of BÖRSE ONLINE. This portfolio pools investments in various AI industry leaders.
Additional Read: After the Correction, the Big Crash: Are Stocks Ready to Plummet by -20% or More?
Disclosure of Conflicts of Interest: The publisher Börsenmedien AG's management and majority shareholder, Mr. Bernd Förtsch, holds direct and indirect positions in the financial instruments mentioned in the publication or related derivatives, which may gain from the resulting price development due to the publication.
Disclosure of Conflicts of Interest: The author possesses direct holdings in the financial instruments discussed in the publication, or related derivatives, which may benefit from any price movements stemming from the publication: Nvidia.
Disclosure of Conflicts of Interest: The price of the financial instruments is generated from an index developed by Börsenmedien AG, for which it holds the rights. Börsenmedien AG has entered into a partnership agreement with the issuer of the securities in question, granting the issuer a license to use the index. In this relationship, Börsenmedien AG is compensated by the issuer.
- Despite the significant drop in the Nvidia stock, Morgan Stanley considers it a potential turnaround, as they rate it as "Overweight" and predict a 38% increase in its price to $162.
- Analyst Joseph Moore, from Morgan Stanley, believes that Nvidia is poised for a new growth phase and urges investors to enter now, despite macroeconomic risks like an economic slowdown or trade wars.
- The unveiling of the new Blackwell graphics processors and Nvidia's strong position in the data center market are factors that highlight Nvidia's significant long-term potential, according to Morgan Stanley.
- For those interested in alternative investment options, the Artificial Intelligence Index of BÖRSE ONLINE pools investments in various AI industry leaders, including Nvidia.
