Morgan Stanley has revised its price target for Nvidia (NVDA, Financial), lowering it slightly from $162 to $160 while maintaining an Overweight rating. Despite this adjustment, Nvidia continues to be a favored choice for the firm. The shift in target price comes amid growing macroeconomic and supply chain concerns which have somewhat dampened investor sentiment.
However, demand for Nvidia's GPUs has surged notably over the past month. This spike is largely attributed to a shortage of inference chips essential for large language models (LLMs) across various regions. The analyst indicates that believing the market is oversaturated with AI products is misguided, given the escalating requirement for inference chips fueling robust demand.
Short-term forecasts for Nvidia remain constrained by factors such as export controls and the limited availability of Blackwell chips, although production is accelerating. Nevertheless, Nvidia is strongly positioned in the market as the need for AI infrastructure continues to grow.
