by Invesdea
So Nvidia +7% today because Morgan Stanley thinks Nvidia is their top pick.
Rating: Overweight
Price Target: $500 ($437 today)
I agree with Morgan Stanley that I don’t see demand will drop anytime soon considering all the AI startups are booming and some of them are actually useful (i.e. Midjourney).
But I also feel that Nvidia has gone up too much in 2023 for a trillion dollar company.
Nvidia earnings are coming up on Aug 23, what are your thoughts?
FYI, the following are some of the quotes from Morgan Stanley’s notes:
- “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.”
- Demand is High
- “We expect NVDA’s Data Center business to drive much of the growth over the next 5 years, as enthusiasm for generative AI has created a strong environment for AI/ML hardware solutions — NVDA’s being one of the most important. Incremental opportunities in AI/ML software & services, networking, and ADAS can drive growth even higher.”
- “Last quarter’s guidance for $4 bn in revenue upside was the largest single increase in one quarter in semiconductor history…The implied $7.5 bn in quarterly data center revenue is trending to $15 bn+ over the next few quarters, which is our primary focus driving enthusiasm for the stock.”
- Supply is Low
- “Per our conversations and public data points, less than half of the current demand is being met.”
- “The exact revenue number in October is less important than the overall trajectory. October shipments are clearly gated by supply…A material amount of July quarter shipments came out of inventory”
- Guidance was Conservative
- “While supply is clearly the gating factor, we believed that the initial guidance was very conservative to begin with.”
- “We still expect a meaningful beat and raise quarter — and, more importantly, strong visibility over the next 3–4 quarters,”
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.