Wall Street just handed Nvidia (NVDA) a major vote of confidence. Morgan Stanley analyst Joseph Moore reinstated Nvidia as the firm’s top semiconductor pick on Monday, knocking Micron Technology (MU) off that spot after memory stocks delivered a jaw-dropping 300% to 900% run since the call was made months ago.
The stock closed at $177.19 on Friday and rallied roughly 3% on Monday to about $182.94 as the note landed on desks. Nvidia is down about 3% so far in 2026, even as its underlying business has kept growing at a remarkable pace. Moore says that gap between performance and stock price is exactly the opportunity.
The firm maintained its Overweight rating and $260 price target, implying about 47% upside from Friday’s close. Moore called the current valuation a “surprisingly good entry point,” noting that Nvidia trades at roughly 18 times projected 2027 earnings despite continued strengthening fundamentals.
Why Morgan Stanley made the switch now
Moore’s core argument is straightforward: Nvidia’s stock has been flat for two straight quarters while its business has kept growing. He attributes that disconnect to two investor fears: whether Nvidia’s growth cycle will peak in 2026, and whether custom chips from hyperscalers and rivals are quietly eroding its dominance.
His answer to both: the evidence points the other way. Moore noted that hyperscalers are signing three-year supply contracts, some with full upfront prepayments, locking in GPU demand well beyond 2026. He called those prepayments a durability signal that is hard to square with the idea that spending is about to slow.
Key reasons behind the upgrade
- Memory stocks surged 300% to 900% since Morgan Stanley made Micron its top pick, raising serious sustainability questions about further gains
- Nvidia’s earnings expectations for the current quarter were revised upward 38% over the past six months, yet the stock barely moved
- Hyperscalers are projected to spend over $660 billion on AI infrastructure in 2026, nearly double the $443 billion deployed in 2025
- Moore’s market share analysis shows Nvidia holds roughly 85% of AI processor revenue, with AMD below 5% and custom ASICs just above 10%
- Even the largest ASIC and AMD users are each expected to grow their Nvidia-based business by more than 80% in 2026
The numbers backing the call
The fundamental case for Nvidia does not require much imagination. Just last week, the company reported a record quarterly revenue of $68.1 billion, up 73% year over year and ahead of the $66.2 billion Wall Street had expected. Data center revenue alone hit $62.3 billion, up 75% from a year ago and accounting for over 91% of total company sales.
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For all of fiscal 2026, Nvidia booked $215.9 billion in revenue, up 65% from the prior year. Full-year net income topped $120 billion. Free cash flow for the year came in at $97 billion.
Q1 guidance was equally striking. Nvidia told investors to expect roughly $78 billion in revenue for the current quarter, in revenue for the current quarter, well ahead of the $72.6 billion analysts had penciled in. The company added that it is not assuming any data center revenue from China in that outlook, meaning any China sales would represent upside.
GTC is the next major catalyst
Moore and the broader market are now watching Nvidia’s GTC conference, running March 16 through 19 in San Jose. Jensen Huang‘s keynote is scheduled for March 16. Moore expects it to resemble the 2024 event, where Nvidia laid out a detailed multi-year product roadmap that helped shift investor skepticism into optimism.
The conference is expected to address market share concerns head-on and provide a fuller picture of the Vera Rubin platform roadmap. Vera Rubin samples have already shipped to early customers, with full production scheduled for the second half of 2026. The new platform is expected to deliver dramatically better performance per watt than Blackwell, a critical selling point as data centers wrestle with power constraints.
Moore’s view is that once visibility into Nvidia’s 2027 earnings trajectory improves, the stock tends to make sharp, concentrated moves higher. He sees the same setup unfolding now as in each of the past three years, when early-year skepticism gave way to strong outperformance once GTC cleared the air.
What about the competition?
The competitive picture is more nuanced than it was a year ago. Bloomberg Intelligence projects that Nvidia will hold 70% to 75% of the AI accelerator market through 2030, but custom ASIC shipments from cloud providers are growing faster than GPUs on a percentage basis in 2026. Google’s TPU, Amazon’s Trainium, and Meta’s internal chips are all scaling up.
Moore does not dismiss this dynamic. He acknowledges that Nvidia may give up one to two percentage points of market share in 2026 as hyperscalers take a more vendor-flexible approach. But his checks show that Nvidia remains the preferred choice in the vast majority of deployments, and that competitive experimentation is happening alongside continued Nvidia expansion, not in place of it.
The bigger structural argument is about ecosystem lock-in. Nvidia’s CUDA software platform, NVLink interconnects, and rack-scale systems create switching costs that chip specs alone do not capture. Moore argues this full-stack advantage is what separates Nvidia from any challenger on a multi-year horizon.
The bottom line for investors
Morgan Stanley’s move reflects a broader argument that the market has been pricing in too much pessimism about Nvidia’s durability at exactly the wrong moment. With over $660 billion in hyperscaler AI spending locked in for this year, Vera Rubin on the way, and GTC just two weeks out, the catalysts are lined up.
Moore’s message is clear enough. The stock spent two quiet quarters building a base while the business kept getting stronger. With Vera Rubin systems already confirmed by Microsoft, Google, Oracle, and CoreWeave, Morgan Stanley just put Nvidia back at the top of its conviction list.
