According to a report from the Financial Associated Press on December 23 (Editor: Huang Junzhi), Morgan Stanley stated, "The darling of AI, NVIDIA, remains the firm's 'Top Stock' for next year, and its latest Blackwell chip series will become the strongest 'tailwind' for the company in 2025, overshadowing any lingering investor concerns."

In a report released recently, Morgan Stanley reiterated its "Shareholding" rating for NVIDIA Stocks, stating that the anticipated success of the company's next-generation AI Chip, Blackwell, has boosted the firm's bullish sentiment. The Target Price given is $166 per share, implying that the stock can still rise by about 23% from its current level.

When recent data appears to be mixed, NVIDIA is often of greatest interest, with potential momentum looking very strong. Analysts wrote in the report: "There is transitional pressure - but from our perspective, by the second half of 2025, the only Topics will be the strength of Blackwell."

These chips are expected to be launched in early 2025. Earlier this year, NVIDIA CEO Jensen Huang stated that market demand for this chip is "crazy." Morgan Stanley pointed out that this chip could become the "revenue driver" in the second half of next year, which could mean that "the stock will rise significantly."

Morgan Stanley also mentioned that the success of the new chip could alleviate some investor concerns regarding the stock in the near to mid-term.

"We believe there are a lot of concerns; some of these are exaggerated, some will cause anxiety in the short term, but we think they are irrelevant in the long term," the report stated.

The firm particularly emphasized four issues that investors have been worried about:

Hopper production slows down.

Investors are concerned that the production speed of NVIDIA's current generation AI Chip, Hopper, will slow down. In the latest Earnings Reports conference call, the company forecasted a revenue growth rate of only 69.5% for the fourth quarter, which is the lowest revenue forecast in seven quarters.

However, Morgan Stanley stated that the slowdown in Hopper production is 'not a problem.'

The reason, of course, is that there are still several quarters left until the end of Hopper's lifecycle. We will not link the production of Hopper to its revenue, as this relationship will last for about three quarters, but there is currently a significant production backlog, so it is time to slow down," the Analyst wrote.

Different products in the Blackwell series Chips will not be shipped simultaneously.

Investors may also be concerned that not all Blackwell products will ship at the same time. NVIDIA has stated that the soon-to-be-released Blackwell GPU will have seven versions.

Morgan Stanley analysts stated, 'We are indeed hearing some types of products are not ready, but we do not believe some types of products will face timing challenges.'

The firm stated that concerns about the launch of Blackwell should 'completely disappear' by the second half of next year.

Competitors are encroaching on NVIDIA's value.

Analysts from Morgan Stanley pointed out that in recent months, some of NVIDIA's value has been "directly" transferred to other chip manufacturers. The firm noted that companies like Broadcom produce ASIC chips (application-specific integrated circuit chip technology), which are custom AI Chips that can replace NVIDIA's GPUs.

However, based on conversations with some customers, we believe that by 2025, the largest users of ASICs will actually turn to purchasing GPUs. We believe that GPUs will significantly outperform ASICs next year." The firm added.

Decreased chip demand.

Large AI Chip customers have seen the benefits of scaling up GPU clusters, which can achieve more advanced computing. However, the firm stated that some financial supporters in this area have questioned whether it is worth doing so.

"Both areas are important, and we cannot rule out the possibility of consolidation in this part of the market. However, we note that many of the innovations NVIDIA has released in recent years are aimed at improving the efficiency of large clusters." The Analyst wrote, referencing NVIDIA's progress in acquiring another chip manufacturer, Mellanox, which will help it expand into the Datacenter supply market.

Analysts also added: "Even if concerns about the AGI (Artificial General Intelligence) arms race have cooled, growth in inference, sovereign (tiered models) training, and corporate training applications are all long-term growth drivers, accounting for about 70% of Datacenter revenue. Therefore, even if there is some consolidation in the AGI arms race, we should still see lasting growth potential."