Nvidia (NVDA) delivered a clean Q1 beat and raise on all metrics, and its expected ramp of its Vera Rubin platform could reinforce its leadership in AI factory economics, Morgan Stanley said in a note Thursday.
Market share concerns are likely dissipating, with Vera Rubin offering a competitive advantage and understanding that the elevated benchmark weighting creates certain headwinds, although valuation at about half of AI peers stands out, according to the note.
Nvidia has consistently delivered the lowest cost per token on its hardware, and is expected to maintain that advantage, the brokerage said. Current products are being benchmarked against competitors' upcoming chips like AMD MI455 or TPU v8, even though Vera Rubin will likely reach general availability before either of those, Morgan Stanley said.
For the October quarter, the brokerage said it now expects revenue of about $102.35 billion and non-GAAP earnings per share of $2.34, up from about $99.02 billion and $2.25, respectively. It also lifted revenue and non-GAAP EPS estimates for 2027 and 2028.
Morgan Stanley maintained an overweight rating on Nvidia and raised the price target to $288 from $285.
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