Nvidia Corp. (NVDA) shares rallied in midday trading Thursday after Morgan Stanley reiterated its “Overweight” rating and $152 price target for the chipmaker, reinforcing its “Top Pick” status. This endorsement comes despite a recent dip in Nvidia’s stock following the January 24th launch of DeepSeek, a competitive AI platform. DeepSeek’s emergence triggered concerns about potential market disruption and increased regulatory scrutiny, particularly regarding export controls.
Nvidia’s stock had fallen over 10% since DeepSeek’s debut. However, Morgan Stanley’s analysts remain bullish, emphasizing the strength of Nvidia’s core growth drivers. These include strong visibility into Blackwell’s supply, positive near-term business prospects, and continued robust customer spending.
While acknowledging that DeepSeek introduces “some headwinds,” especially concerning potential government responses to the platform, Morgan Stanley characterizes DeepSeek’s launch as an “evolutionary upgrade” rather than a disruptive revolution.
The firm notes the inherent nature of rapid technological advancement in AI, citing Nvidia CEO Jensen Huang’s predictions of exponential performance improvements. “In a space where the CEO of Nvidia has stated that AI performance at the processor level has improved by one million times over the last decade and will do so again in the next decade, some deflation is not surprising,” the analysts wrote.
Crucially, Morgan Stanley stated they have seen no changes in plans from Nvidia’s major partners or customers. The analysts also highlighted Nvidia’s dominance in AI inference – a critical and growing area within the AI sector – as a key reason for their continued optimism.
CWEB Analyst Insight:
CWEB analysts note that Nvidia, a leading indicator for the AI industry, continues to be a favored investment among analysts. Morgan Stanley’s (MS) reaffirmed “Buy” rating signals strong confidence in Nvidia’s ability to weather market fluctuations and maintain its leadership position in the AI and semiconductor markets.
CWEB analysts emphasize that Nvidia’s strategic market positioning and ongoing technological innovation remain essential to its long-term growth trajectory, even as the company navigates an evolving competitive landscape and potential regulatory uncertainties. The stock’s midday rebound suggests investors are taking comfort in Morgan Stanley’s assessment, reinforcing the company’s perceived resilience and future potential.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.
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