Morgan Stanley says it’s time for investors to lean back into Nvidia as it trades at what the investment bank calls an attractive entry point. The Wall Street bank stood by its overweight rating and $260 price target on the dominant AI chipmaker and nation’s largest public company. It also named Nvidia its top semiconductor pick, replacing Micron Technology. Shares of Nvidia have rallied 45% over the past year, but are down about 3% in 2026. Morgan Stanley’s 12-month price target implies 47% upside versus Nvidia’s Friday close of $177.19. NVDA 1Y mountain NVDA 1Y chart Analyst Joseph Moore wrote that shares of Nvidia now sell for 18 times estimated earnings for 2027, a “surprisingly good entry point.” Lackluster Moore pointed to concerns about Nvidia’s market share and sustainability as causes for the recent lackluster performance. But he said that there is no evidence suggesting that hyperscaler investments in Nvidia’s chips will peak this year. “There is simply no indication that the current investment cycle has run its course, and there is plenty of evidence that the spenders intend to keep spending for at least a couple more years,” he wrote. “So we don’t buy into hundreds of gigawatts in 2029, but we also don’t see a peak in 2026, and our growth expectations for CY27 grow seemingly by the week.” Nvidia’s market share may dip this year, but demand will remain robust for Nvidia’s Rubin product, shipping in the second half of the year, the analyst added. The bank also believes that Nvidia leadership will address market share concerns at its GTC AI conference later this month, and could successfully demonstrate “a leadership roadmap that again puts Nvidia ahead of competition.” Another tailwind could come as supply constraints on AI processors potentially ease in the coming months, Moore wrote. That, in turn, could lead to market share reacceleration. Moore added that the most important element investors should take account of now is the durability of current demand rather than the strength of the current environment. “For the last two quarters Nvidia [stock] has not moved while business has continued to strengthen — a function of concerns about the durability of current growth,” he wrote. “Those concerns should turn to 2027 enthusiasm in the coming months.”
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