Nvidia
stock had a roaring start to the year, but has since cooled off. Now may be the time to buy, with the shares set to move on the back of quarterly earnings next week and eyed by
Morgan Stanley
as a winner.
Chip maker
Nvidia
(ticker: NVDA) has been a key beneficiary of this year’s frenzy over artificial intelligence, with the stock’s near-190% rise since January buoying the
S&P 500
and
Nasdaq.
But recent price action has been sluggish: while the stock was up 3.9% on Monday, the shares have shed more than 10% since peaking in late July, which analysts led by Joseph Moore at Morgan Stanley say is linked to macro concerns and supply anxieties.
The dip is a great opportunity to buy, according to Moore’s team, who named Nvidia their top pick heading into earnings. Morgan Stanley rates Nvidia at Buy with a $500 price target, implying gains of 23.5% from Monday’s opening price below $405. It’s not a counter-consensus view on Wall Street, with Nvidia stock garnering an average rating of Buy among analysts surveyed by FactSet, with an average price target above $515.
Nvidia is set to report earnings after the bell on Aug. 23, and Moore’s team at Morgan Stanley expects both blowout results and a strong outlook.
“We think the recent selloff is a good entry point, as despite supply constraints, we still expect a meaningful beat and raise quarter—and, more importantly, strong visibility over the next 3-4 quarters,” the team at Morgan Stanley wrote. “Nvidia remains our Top Pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply demand imbalance that should persist for the next several quarters.”
Write to Jack Denton at [email protected]
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