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Nvidia Likely to Post Strong Results But Investors to Focus More on Long-Term Growth Drivers, Morgan Stanley Says

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Nvidia Likely to Post Strong Results But Investors to Focus More on Long-Term Growth Drivers, Morgan Stanley Says

Nvidia (NVDA) is expected to post strong fiscal second-quarter results, but investors are likely to focus more on the chipmaker's longer-term growth drivers, Morgan Stanley said in a Monday client note.

Morgan Stanley expects the technology bellwether to record "another quarter of beat and raise," amid robust demand for Blackwell chips. However, the brokerage believes the results are less likely to be a stock catalyst, as investor focus is centered on longer-term issues such as market share, concerns over circular financing, the trajectory of its gross margin, and the magnitude of contribution from its Vera Rubin platform in the second half.

Vera Rubin is Nvidia's next-generation artificial intelligence computing platform designed for large-scale agentic AI and advanced reasoning workloads.

"Nvidia stock has seen a negative next day reaction for the last four consecutive quarters, despite what has been a series of very strong numbers," according to Morgan Stanley. "We aren't necessarily optimistic that trend reverses."

Nvidia is scheduled to report its fiscal second-quarter results next week. The brokerage estimates Nvidia to post per-share earnings of $2.07 and revenue of nearly $91.2 billion for the quarter, compared with the current consensus on FactSet for $2.08 and $91.93 billion, respectively.

Morgan Stanley remains constructive on margins, financing and market share, but doesn't believe management will provide "anything new" that would positively or negatively change investors' views. The brokerage expects Nvidia to reiterate its fiscal 2027 margin outlook in the mid-70% range.

Morgan Stanley expects the company to highlight Rubin as a platform that could significantly improve AI factory economics over Blackwell. The brokerage said its checks indicate strong enthusiasm for Rubin, but it will take time for the market to assess how the platform could shift Nvidia's market share against rivals.

Morgan Stanley has an overweight rating on Nvidia's stock with a price target of $288.

UBS Securities and BofA Securities recently said they expect Nvidia to post strong fiscal second-quarter results as shipments of Vera Rubin begin to ramp.

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