During the current technology correction in the US stock, Nvidia's stock price fell by more than 16% over the past month. Nevertheless, the computing power giant has received support from Wall Street's major institution Morgan Stanley.

On Wednesday local time, Morgan Stanley analyst Joseph Moore and his team published a research report stating that they are optimistic about Nvidia's long-term growth potential, and the market's concern about the company will gradually weaken over time. Morgan Stanley has re-evaluated Nvidia's stock as a "top pick" while maintaining a "shareholding" rating.

Moore's team believes that Nvidia's datacenter business will continue to contribute to most of the company's growth over the next five years, particularly in the field of AI/ML (artificial intelligence/machine learning) hardware solutions. With the release and delivery of the Blackwell super chip, Nvidia is expected to further consolidate its competitive position in the AI field.

Morgan Stanley believes that this round of selling may be a very good buying opportunity, setting Nvidia's target stock price at $144.00, 38.8% higher than Tuesday's closing price.

Morgan Stanley predicts that Nvidia's earnings per share will increase from $1.30 in 2024 to $3.70 by 2027, and the PE ratio will decrease from 51.0 times in 2024 to 29.7 times.

Bullish on Blackwell

Morgan Stanley stated that the Blackwell product has aroused strong interest in the market, especially its significant improvement in reasoning performance, which further drives customer enthusiasm.

Nvidia has sent Blackwell samples this week. Although the complexity of the product and the frame may bring some challenges, the supply chain is improving, and the initial shipment volume of Blackwell in the fourth quarter of 2024 may be considerable.

All signs indicate that production of Blackwell and frames is growing strongly in the second half of the year.

"We expect the initial shipment volume in the fourth quarter to be considerable, but we still believe that Hopper will account for most of the revenue by early 2025."

Morgan Stanley is optimistic that Blackwell's availability will further consolidate Nvidia's competitive position.

Blackwell is seen as one of the key drivers of Nvidia's future growth, particularly in the field of AI/ML hardware solutions, and as demand shifts from Hopper to Blackwell, the company's visibility is expected to increase.

Demand for Hopper remains strong. Production of Hopper continues to rise, with H100 transitioning to H200 (bringing better HBM3e memory bandwidth and higher memory capacity), and we hear confidence in strong sales for these two products.

Although Morgan Stanley is optimistic about Nvidia's prospects, it also points out some potential risks, including a weak global economy that may affect capital expenditures, and lower AI development costs may intensify competition. Nevertheless, the institution believes that these risks will not affect Nvidia's long-term growth trend.