Morgan Stanley Raises Nvidia Price Target, Estimates Ahead of Investing.com Earnings

Investing.com — Morgan Stanley (NYSE:) raised its estimates for Nvidia (NASDAQ:) stock ahead of the company’s earnings report next week. Despite supply constraints, the company expects Nvidia to have another robust quarter, but expects more significant upward revisions to occur later in the year.

The analysis notes that Nvidia’s new products, particularly Blackwell, are suffering entirely from supply constraints, which could limit the upside potential for the current quarter and outlook.

Still, Morgan Stanley analysts expect Blackwell’s January-quarter sales could reach nearly $5 billion to $6 billion, above the implied figure but slightly below expectations from a few weeks earlier.

“To be clear, it is difficult to interpret this accurately because the month-over-month increase is so steep – a one-week pullback in our pushout has significant implications,” analysts led by Joseph Moore said in a note.

In terms of product demand, the company notes that while demand for the H100 is weaker, interest in the H200 is stronger. This pattern is consistent with previous quarters in which Nvidia beat guidance by around $2 billion and forecast sequential growth.

For the January quarter, consensus estimates are at $36.5 billion, and Morgan Stanley predicts Nvidia could offer slightly higher guidance, albeit limited by supply issues.

The Wall Street firm also forecasts better gross margins for Nvidia in October, although the initial Blackwell ramp is expected to show lower margins starting in January. The chipmaker had previously forecast a decline in gross margin from 75.7% in July to 75.0% in October, which Morgan Stanley sees as conservative.

They expect the costs associated with the initial Blackwell launch will not be repeated and minimal mix headwinds are expected in October.

“However, the rise of Blackwell and its related products all brings immature returns and a bit of margin uncertainty, so we expect the company to continue to warn of further gross margin headwinds,” analysts added.

Morgan Stanley raised its NVDA estimates for the second half of 2025. The company’s FY26 revenue, non-GAAP gross margin and non-GAAP EPS forecasts were increased from $166.9 to $176.78 billion, 73.8% and 4.03%, respectively US dollar increased billion, 73.7% and $3.78.

This adjustment also resulted in an increase in Nvidia’s price target from $150 to $160, based on a 42x multiple of the company’s forward calendar year 2025 earnings estimates.

Nvidia stock remains Morgan Stanley’s top pick. The bank sees this as “something of a transitional quarter and therefore not a major catalyst for the stock,” but reiterates the stock’s “Overweight” rating given the expectation “that the Blackwell cycle will continue to provide significant upside in the next two hours will take care of.”