After in-depth research on the Taiwanese chip industry chain, Morgan Stanley significantly raised NVIDIA's target price to $144

According to the financial news app Zhitong Finance, on Monday Eastern Time, the top Wall Street investment bank Morgan Stanley significantly raised the performance expectations and target stock price of the AI chip leader NVIDIA (NVDA.US), stating that the institution believes, after the latest research, that NVIDIA's performance data for at least this year will be "strong" due to unparalleled demand. Morgan Stanley raised NVIDIA's target stock price for the next 12 months from $116 to $144, and maintained its "overweight" rating on the institution. Overall, Morgan Stanley continues to be optimistic about NVIDIA's stock price trend, believing that its performance will be much stronger than the broader market, but it will still take time to recover from the recent pullback.

NVIDIA's stock price fell more than 2% in early Monday trading on the US stock market, hovering around $120. Since the "triple witching day" options expiration, NVIDIA's stock price has been under pressure from global hedge funds and retail investors looking to take profits, as it has been in a vacuum period for performance and lacks recent fundamental positive news, leading to a significant drop of over 10% from its historical high on June 20.

Morgan Stanley stock analyst Joseph Moore wrote in a recent research report that recent chip industry research from Taiwan is enough to keep the institution confident in NVIDIA's recent performance data, with the catalyst path of demand still "strong."

Morgan Stanley's research data shows that the demand outlook for NVIDIA's AI GPUs remains very strong, with astonishing demand for H100, increasing visibility for H200, and strong demand for NVIDIA's H20 from Chinese companies. Morgan Stanley stated that although the delivery time for H100 has been significantly shortened, this is a natural phenomenon during the product transition period. Morgan Stanley expects visibility to improve significantly in the next 3-4 quarters. While the market's strong expectations for NVIDIA's AI GPUs have already been partially reflected in the stock price trend, the future outlook for NVIDIA remains very optimistic.

Analyst Moore wrote: "The data points we discussed in two Asian reports, as well as our checks in the US market, show that demand for NVIDIA's AI GPUs remains strong at least this year." "That being said, it is clear that we are at the tail end of the Hopper architecture cycle (H100 and H200 based on the Hopper architecture), with much lower bubbles and visibility than before. Considering the enthusiasm for NVIDIA's latest Blackwell architecture AI GPUs (the soon-to-be-produced B100/B200/GB200) from companies we learned about in our research in Taiwan, it is much stronger than we expected."

Morgan Stanley's research data also shows that the supply situation of HBM3 memory systems has improved, but the upgraded HBM3E remains a key supply bottleneck. Morgan Stanley expects that initially SK Hynix will become the main supplier of HBM3E for NVIDIA's AI GPUs based on Blackwell, and Micron's HBM3E will be configured for the highly demanded H200, with the potential to become a supplier of HBM3E needed for Blackwell AI GPUs in the future After conducting research, Morgan Stanley reiterated its bullish confidence in NVIDIA's GPU supply chain system, including NVIDIA's AI GPU sole foundry - "Chip Foundry King" TSMC, KYEC, and others.

Therefore, following the latest research, Morgan Stanley analyst Moore now believes that, calculated according to GAAP accounting standards, NVIDIA's earnings per share may reach $3.34, and adjusted earnings per share will reach $3.53, far exceeding Morgan Stanley's previous expectations of $2.91 and $3.10.

NVIDIA's stock price may continue to fluctuate in the short term, but it is difficult to change the "long bull" trend

Looking at a longer time frame, NVIDIA's stock price has surged over 1000% since October 2022, and last week it briefly became the world's highest market cap listed company, topping the "Global Stock King" throne for the first time. After this 1000% surge in the AI frenzy, global funds may transition from enthusiastic irrational chasing to rational thinking, potentially indicating that NVIDIA's stock price, which has repeatedly hit new highs, may experience short-term downward adjustments or consolidation, but it is difficult to change NVIDIA's stock price "long bull trend" in the AI era.

Wall Street analysts bullish on NVIDIA's stock price have emphasized that NVIDIA will continue to rise, potentially reaching $150 or even $200 within the year - implying that NVIDIA's market value will surpass the $5 trillion mark. Since the beginning of this year, the average target price set by Wall Street analysts has consistently lagged behind NVIDIA's stock price surge, forcing all analysts covering NVIDIA's stock to continuously raise their target prices.

Eric Jackson, a hedge fund manager from EMJ Capital, stated that NVIDIA's stock price will continue to soar by the end of this year. Jackson predicts that by the end of this year, the stock price will reach $250, representing a potential upside of about 100% from current levels. If this upward trend materializes, the valuation of this AI chip company will reach a staggering $6 trillion.

Jackson said, "I believe that in the second half of this year, people will begin to see strong sales of Blackwell chips, with their high profit margins, and start considering the upcoming Rubin chips. I think we will start to see this excitement reflected in a high forward P/E multiple, and if this happens, the company could reach a $6 trillion market value."

Bank of America emphasized that any degree of decline in NVIDIA's stock should be seen as a good opportunity to buy more stocks at a lower price. Analysts at Bank of America wrote in their latest report that investors should continue to be optimistic about this chip giant that is driving the prosperity of AI, and Bank of America reiterated its "buy" rating on NVIDIA with a target price as high as $150.

In the report, Bank of America emphasized that the hardware deployment cycle of Generative AI (GenAI) may last up to 3-5 years, but it is currently only in the 2nd year, with NVIDIA expected to have an opportunity of up to $300 billion annually, roughly three times the company's expected revenue for this year Bank of America also expects NVIDIA's next-generation AI GPU based on the Blackwell architecture to bring significant revenue contributions. The bank also refutes the "AI bubble theory" derived from the "Internet bubble period" in 2000, emphasizing that unlike the "Internet boom period" which relied on high-risk debt financing, the deployment of generative AI is a competition among technology leaders with strong fundamentals such as some of the most well-funded cloud computing giants