NVIDIA Corporation (NVDA.US) Removed from Morgan Stanley's Top Picks List After Stock Plunge; Overweight Rating and $300 Price Target Maintained

Morgan Stanley announced in its latest research report released on November 11 that it has removed NVIDIA Corporation (NVDA.US) from its research department's top picks list, because the stock had fallen more than 25% cumulatively since being added to the top picks list on October 2, triggering the bank's stop-loss policy for top picks. However, Morgan Stanley emphasized that this adjustment does not mean a change in its judgment regarding NVIDIA Corporation's fundamentals or long-term growth prospects. The bank still maintains NVIDIA Corporation's "Overweight" rating and a 12-month price target of $300. Morgan Stanley analyst Joseph Moore and his team pointed out that although NVIDIA Corporation's share price has continued to come under pressure recently, artificial intelligence (AI) infrastructure construction remains in a strong and sustainable expansion phase. The bank believes that NVIDIA Corporation's technological leadership in the AI computing field has not wavered, and as data center construction faces constraints in land, power, and infrastructure, NVIDIA Corporation may even be expected to further expand its market share. At the same time, Morgan Stanley also acknowledged that NVIDIA Corporation still faces certain uncertainties in the short term. The bank particularly emphasized that Chief Executive Officer Jensen Huang's leadership is crucial to the company's strategic direction, but this has not changed its positive judgment on NVIDIA Corporation's long-term investment value. From the perspective of product competitiveness, Morgan Stanley expects that NVIDIA Corporation's next-generation Rubin architecture will become the leading solution for generative AI workloads. Against the backdrop of AI computing demand continuing to exceed supply, the Rubin and subsequent Rubin Ultra platforms are expected to help NVIDIA Corporation extend its performance advantage and drive the market to further raise the company's earnings expectations. Morgan Stanley believes that NVIDIA Corporation's growth potential comes not only from demand for AI chips, but also from the increasing commercial value of its data center system-level solutions. In addition, AI personal computers, autonomous driving, Siasun Robot&Automation, and software businesses may also become new growth drivers in the future. On valuation, Morgan Stanley maintains NVIDIA Corporation's $300 price target. Compared with the closing price of $168.89 on November 10, this implies potential upside of about 77.6%. The bank also provided a bull-case valuation of $350 and a bear-case valuation of $160. According to the base-case forecast in the research report, NVIDIA Corporation's revenue is expected to grow 88% and 70% in 2026 and 2027, respectively. Morgan Stanley expects NVIDIA Corporation's 2026 revenue to be about $215.9 billion, rising further to $406 billion in 2027, and reaching $690.2 billion and $970.2 billion in 2028 and 2029, respectively. However, Morgan Stanley pointed out that NVIDIA Corporation already has a relatively high market share and gross margin, which also means that room for further expansion of its valuation multiple in the short term is relatively limited. The bank believes that NVIDIA Corporation's valuation is roughly in line with the overall market, but still at a discount compared with some computing chip peers. Regarding potential risks, Morgan Stanley warned that if AI infrastructure supply grows faster than expected, causing data center demand growth to slow markedly, or if AI development costs fall sharply, competitors launch more competitive products, and large cloud computing customers accelerate the development of in-house chips, all of these could pose challenges to NVIDIA Corporation's growth prospects. In addition, uncertainties brought by tariffs and export controls also warrant attention.