Morgan Stanley issued a top rating for Nvidia, noting the recent sell-off “presents a good entry point as we continue to hear strong data points short term and long term, with overblown competitive concerns.”

Nvidia's central position in the AI market and its ability to attract customers back from custom silicon alternatives highlight its enduring competitive edge. Analysts noted, “This is a large market and is not going to be served by a single NVIDIA card, but we are hearing multiple instances of customers who have invested in custom silicon or alternatives coming back to NVIDIA for upside.”

Morgan Stanley maintains a positive outlook for Nvidia stock, chiefly driven by robust demand indicators and strong customer enthusiasm for the Blackwell GPUs. Visibility will actually increase as demand moves from Hopper to Blackwell, as the constraint will shift back to silicon; H100 lead times are short, but H200 lead times are already long, and Blackwell should be even longer.

With a valuation that appears “much more reasonable than a few weeks ago,” Morgan Stanley believes the market is “taking a very glass half-empty view of some of the hyperscale comments, where there is a clear desire on the part of customers to continue to commit resources to developing multi-modal generative AI.”