Morgan Stanley (MS, Financial) has raised its price target for Nvidia (NVDA, Financial) from $150 to $160, citing Nvidia's recent bullish performance and anticipated easing of supply-chain challenges. Morgan Stanley analysts, led by Joseph Moore, forecast that Nvidia's new Blackwell product line will significantly boost revenue in the January quarter, with expected sales in the $5-6 billion range. However, these potential gains may face some offset due to ongoing supply constraints, which could affect current quarter guidance.
Additionally, Nvidia's product demand trends reveal a shift from the H100 to increased demand for the H200, aligning with Nvidia's recent pattern of raising its sales guidance by approximately $2 billion. Analysts estimate Nvidia's January quarter revenue guidance could surpass consensus at $36.5 billion.
Morgan Stanley also predicts an increase in Nvidia's gross margins through FY2026, though initial Blackwell ramp-up margins are expected to be lower. Nvidia's previous gross margin guidance dropped from 75.7% in July to 75.0% in October, a conservative estimate according to Morgan Stanley. Consequently, the firm has raised its FY26 revenue and EPS estimates for Nvidia to $176.78 billion and $4.03, with 73.8% non-GAAP gross margins.
While Morgan Stanley considers this earnings period transitional, it maintains Nvidia as a top buy with an Overweight rating, driven by Blackwell's projected impact on late 2025 growth.
