NVIDIA, the AI winner, is currently working on its latest chip generation “Blackwell,” expected to hit the market later this year. According to “MarketWatch,” Morgan Stanley analyst Joseph Moore predicts the first deliveries of Blackwell chips in the October quarter. Despite this anticipation, he doesn’t foresee any customer hesitation in purchasing, leading him to raise his expectations for NVIDIA and its stock.
Strong Demand for Hopper Chips
In a Monday analysis obtained by “MarketWatch,” Moore states that while NVIDIA is nearing the end of the Hopper cycle, demand indicators for this current chip generation remain strong. The H100 and H200 chips from the Hopper generation are still highly sought after in China and Taiwan, boosting Moore’s confidence in short-term numbers. “The significant rise in H2 models and demand alleviates any concerns about a pause before Blackwell,” Moore commented. He anticipates that older products will continue to contribute significantly to NVIDIA’s revenue into early next year.
However, customer enthusiasm for the upcoming Blackwell chip remains high, driven by the substantial increase in inference performance, according to the Morgan Stanley expert. The ramp-up in NVIDIA’s supply also appears to be progressing well, “despite reports from our contacts that the exceptional complexity of Blackwell cards and racks can be challenging.”
Given these insights, the Morgan Stanley expert raised his price target for NVIDIA stock from $116 to $144 on Monday, maintaining a “Overweight” rating. “Given the significant appreciation since the last earnings report, we’re not overly aggressive at these levels, but this remains the most compelling story in the AI semiconductor space, and with the transition from H100 to H200 and then to Blackwell, visibility and order backlog will significantly improve,” Moore said, defending his new price target, which is slightly lower than other experts. For instance, Jefferies recently raised its target for NVIDIA stock to $150. Moore notes that the bar for NVIDIA is now much higher given the substantial market cap increase in recent weeks.
Following the release of the analysis, NVIDIA’s stock closed Monday at NASDAQ with a gain of 0.62% at $124.30. This leaves approximately 16% upside potential to Moore’s target price. However, in pre-market trading on Tuesday, the stock dipped 1.20% to $122.86.
Analyst Expects Higher Earnings for NVIDIA
Morgan Stanley analyst Joseph Moore didn’t just raise the price target for NVIDIA stock. Given the robust data points, he also expects higher earnings for the US company. According to “InvestorPlace,” Moore’s earnings estimate is now $3.34 per share on a GAAP basis and $3.53 per share on an adjusted basis. Previously, his earnings expectations were only $2.91 per share on a GAAP basis and $3.10 per share on an adjusted basis.
However, it will be some time before the next earnings report, as NVIDIA had just released its first-quarter results for the fiscal year 2025 on May 22, once again exceeding expectations.