NVIDIA Corporation (NVDA.US) received a pre-performance increase in its target price to $285 from Morgan Stanley. Blackwell and Rubin are expected to contribute trillion-dollar revenues.

NVIDIA Corporation (NVDA.US) will announce its first-quarter financial report after the US stock market closes on Wednesday. Before the release of the financial report, Morgan Stanley analyst Joseph Moore once again expressed optimism about the prospects of NVIDIA Corporation, listing several key focus points that investors should pay attention to in this earnings season. Moore expects NVIDIA Corporation to continue its consistent performance of "better-than-expected results and raised guidance" in the past. He predicts that the company's revenue for this quarter will be approximately $3 billion higher than market expectations, and the performance guidance may exceed market expectations by $4 billion. In March of this year, Morgan Stanley listed NVIDIA Corporation as the "preferred target" in the semiconductor industry, believing that it is still one of the major beneficiaries of the generative AI wave. The bank also raised its forecasts for NVIDIA Corporation's performance for several upcoming quarters and long-term forecasts. Specifically, Morgan Stanley raised its revenue expectations for the April quarter from $78.25 billion to $79.26 billion and earnings per share expectations from $1.69 to $1.72. Revenue expectations for the July quarter were raised from $84.84 billion to $87.88 billion, and earnings per share expectations were raised from $1.93 to $2.01. In terms of long-term forecasts, Morgan Stanley significantly raised its revenue forecast for NVIDIA Corporation's fiscal year 2027 from $353.8 billion to $380.59 billion, and its earnings per share forecast from $7.93 to $8.61. For fiscal year 2028, revenue forecasts were raised from $452.4 billion to $587.45 billion, and earnings per share expectations were raised from $10.14 to $13.11. Moore particularly emphasized the importance of the Blackwell and Rubin AI platforms. He expects that the cumulative revenue of the Blackwell and Rubin product lines will reach $1 trillion from 2025 to 2027. After deducting about $30 billion in revenue related to Hopper products in 2025, Morgan Stanley expects the data center business revenue of NVIDIA Corporation for 2026 to 2027 to reach $84.5 billion, and the overall scale will be even higher including other products. In comparison, the market currently expects data center revenue for the same period to be around $78.5 billion, while Morgan Stanley's latest forecast reaches $88.4 billion. Based on a more optimistic long-term profit outlook, Morgan Stanley raised NVIDIA Corporation's target price from $260 to $285. This target price is based on a 22x P/E ratio for expected earnings in 2027. As of the beginning of trading on Monday, NVIDIA Corporation's stock price was hovering around $220. However, Moore also pointed out that as the Rubin architecture begins mass production and supply chain costs increase, NVIDIA Corporation's gross margin may face some pressure in the future. He expects the company's gross margin for the fiscal year 2028 to be around 72.7%, lower than current levels. At the same time, Moore believes that NVIDIA Corporation's current supply chain reserves are still quite sufficient. As of now, the company has signed $95 billion in purchase commitments and holds about $21 billion in inventory, which can cover most of the supply needs for the next 18 months. In addition, investors in this earnings conference call will also focus on the recent launch of Groq products, the independent CPU business, and the latest developments in the Vera Rubin product cycle. Moore expects that the Vera Rubin platform still has the potential to start mass production as planned in the second half of this year.