Morgan Stanley Bangs the Drum on Nvidia Stock

Nvidia (NASDAQ:NVDA) stock might be a multi-year winner with its leadership in AI chips propelling it right to the very top of the stock market food chain, but 2025 has kicked off in rather muted fashion for the semi giant.

The stock has been subjected to some painful losses recently including a historic beating on account of DeepSeek’s noisy entry into the AI game. The Chinese start-up’s latest AI model has been hailed as a game-changer as it can perform just as well as its US equivalents using far less computational power and has apparently cost far less to develop. Since Nvidia’s GPUs power AI infrastructure, investors are worried that if DeepSeek can match or surpass ChatGPT and Llama with less processing power, GPU demand could suffer.

However, with the stock down 4% since the start of the year, could this be an attractive entry point? Morgan Stanley analyst Joseph Moore thinks so, viewing the DeepSeek selloff as a “buying opportunity.”

While Moore hails DeepSeek as a “strong evolutionary upgrade in the AI space,” it is just one of many advancements that have taken place over the past year. Moreover, signs that the model was derived from proprietary sources, improved by sacrificing certain security features, and prone to high latency if key expert data is missing, suggest that some benchmark results may be optimized.  

That said, the bear thesis for Nvidia is not a fanciful one and rests on a few key points. One concern is the potential for further export controls, with Moore believing more restrictions are “almost certainly coming.” Another risk is the shifting “financing environment” for AI spenders – previously, AI investments were met with enthusiasm, but now there’s greater scrutiny due to the “perceptions around limitations on scaling.” Lastly, investor sentiment has “turned quite negative,” and while major AI infrastructure projects are still pushing forward, skepticism is high. It remains to be seen whether “revenue acceleration” can restore confidence.

That said, Moore has in no way turned bearish and remains “very optimistic on how the balance of the year plays out,” highlighting several reasons why he remains an NVDA bull. Industry checks show that demand for Hopper is firming up and is strong for Blackwell “in all forms.” Meanwhile investor sentiment around large AI training clusters has weakened, but major cloud providers continue expanding, while inference workloads are also set to drive long-term growth, with Nvidia positioned well as the market prioritizes high-performance solutions. And even though ASICs have recently gained favor over GPUs, Moore expects that trend to reverse in the second half of the year, with GPU revenue acceleration likely outpacing ASICs.

So, with all that to play out, Nvidia remains a Top Pick for Moore, who rates the stock as an Overweight (i.e., Buy). His $152 price target implies ~24% upside potential from current levels. (To watch Moore’s track record, click here)

Overall, Wall Street analysts are overwhelmingly bullish on NVDA; out of 41 recent analyst reviews, 38 rate it a Buy, with just 3 opting for Hold. That translates to a Strong Buy consensus rating. Looking ahead, the average price target of $178.71 indicates shares could climb ~39% higher over the next year. (See Nvidia stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.