Morgan Stanley raised its target on Nvidia shares ahead of the report. What to expect from it?

Morgan Stanley confirmed its recommendation to buy Nvidia shares and raised their target price: now it expects their growth by 14%. The bank's analysts count on strong financial results for the last quarter, which Nvidia will report next week. In addition, they hope for a positive outlook. Their optimism is based on high demand for Nvidia products, gradual elimination of supply problems and expectations that the company will be able to hold about 85% of the market in the coming years.

Morgan Stanley raised its target price on shares of graphics processor maker Nvidia from $200 to $206, and maintained an Overweight rating ("above market") ahead of its quarterly earnings release, which is expected on August 27. CNBC reported. The updated target implies growth of quotations by 14% compared to the closing price on Friday, August 15.

"Expectations for Nvidia's reporting have risen, and we believe this is warranted. We forecast a strong quarter and a positive outlook, although we remain a bit cautious on the current quarter - our main optimism is related to what lies ahead," wrote analyst Joseph Ma.

Shares of Nvidia were up 1.4% at the moment in Monday trading, but then the pace slowed to about +0.5%. Compared to the beginning of 2025, the stock is now 35% more expensive.

Right now, supply issues remain the main constraint on Nvidia's sales, Moore said. However, bottlenecks in the chain will be gradually eliminated, and demand for products continues to grow, supported not only by "a handful of major customers" but also by a wider range of customers, CNBC reports.

"While the bar of expectations is now higher in the short term, the 12-month outlook for demand, supply and the competitive environment remains very favorable," Moore is quoted by Barron's as saying.

The analyst noted that Morgan Stanley was more optimistic than most analysts three months ago about both Nvidia's demand and supply issues, but that consensus forecasts have also improved since then.

"But we remain more optimistic [believing] that the company has a better chance of increasing [market] share in 2025 and keeping it at about 85% in 2026 [calendar year], even with competition from other manufacturers and ASIC chips (highly specialized chips that are 'tailored' to one function and perform it as efficiently as possible." - OnInvest)," Moore noted.

Given this, the analyst raised his revenue forecast for the July quarter from $45.2 billion to $46.6 billion, and for the October quarter (going on now) - to $52.5 billion against the previous estimate of $51.3 billion. Moore called Nvidia's return to the Chinese market an additional growth factor.

On August 18 investment bank Cantor Fitzgerald also maintained its recommendation to buy shares of Nvidia (Overweight rating), raising the target price of its stock from $200 to $240. His assessment implies a 33% growth of quotations compared to the closing on Friday.

Jefferies on Sunday, August 17, called concerns about the release of Nvidia's new Rubin chips exaggerated, Barron's writes. Fubon Research analyst Sherman Shang suggested last week that Nvidia may delay the next-generation chips to better compete with AMD's expected MI450 processor. An Nvidia spokesperson in a comment to Barron's at the time called Fubon's information incorrect and said the project is on schedule. Jefferies, too, believes that the chip should still be expected to start production in the second quarter of 2026 as planned.

A total of 65 analysts have rated Nvidia shares, and the vast majority - 58 - advise buying the company's stock (Buy and Overweight ratings). Six are neutral (Hold) and only one advises to sell the stock.

This article was AI-translated and verified by a human editor