Investment firm Morgan Stanley (MS) recently met with Nvidia’s (NVDA) management and came away with several key insights. According to five-star analyst Joseph Moore, who has a Buy rating and $210 price target, the chipmaker is capturing a larger share of the money that’s being spent on cloud services, and management remains very confident about future demand. Interestingly, most of the growth so far has come from companies switching from CPUs to GPUs for existing uses. Although this trend is expected to continue, the truly game-changing uses of AI haven’t even started yet.
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As a matter of fact, Moore said that new uses for AI are just beginning in areas like healthcare, law, and industrial automation, which could be the next big growth drivers. Over time, robotics could bring AI into the physical world, with new types of AI models designed for specific industries. As a result, this supports Morgan Stanley’s view that the AI infrastructure market could grow to $3–5 trillion by 2030. Separately, Moore also addressed vendor financing, which has been a hot topic due to Nvidia’s deal with OpenAI (PC:OPAIQ).
He explained that these investments aren’t meant to create demand but to speed up innovation. For example, Nvidia’s deals with CoreWeave and the UK government are helping build data centers faster. Finally, Moore noted that Nvidia’s team doesn’t seem to be too worried about AMD’s (AMD) progress, despite its OpenAI partnership. This is because while other companies can make strong chips for specific tasks, Nvidia’s all-in-one platform and flexible GPUs give it a long-term edge.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 36 Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $219.42 per share implies 15.9% upside potential.
