Morgan Stanley raised its price target for NVIDIA (NVDA) to $1,000 from $795 in a note Wednesday, reiterating an Overweight rating on the stock, saying the business continues to strengthen.
Despite Nvidia (NASDAQ:NVDA)'s strong rise so far this year, analysts at Morgan Stanley made the case for maintaining outsized exposure to AI, adding that NVIDIA is increasingly the best way to get that exposure in their coverage.
The bank believes investors should maintain outsized AI exposures as durability grows.
"Longer term, we are highly encouraged by longer term investment plans firming up," said the bank. "The short term also remains very strong, though we would continue to report that demand seems stronger than supply chain."
"Preferring NVIDIA seems unimaginative, as it was the best-performing stock last year, is again the best-performing stock this year, and it has risen to market caps that we would have thought of as unfathomable a few quarters ago," they added. "That said, the peers have not been undiscovered either, with stocks with direct exposure to these markets, such as AMD (NASDAQ:AMD) and MRVL, having risen to new multiple highs (as stocks have gone up while overall numbers have come down)."
The bank also highlighted several factors that keep them on the NVDA side of the ledger, including shortages of rack space driving market share back to NVIDIA, the company's product execution, and rack scale products increasing NVIDIA monetization.
"We would rather buy NVIIDA than the NVIDIA supply chain, as the company's order patterns are likely to be higher," concluded Morgan Stanley.