TLDR
- Morgan Stanley reinstated Nvidia as its top semiconductor pick, citing an undemanding valuation.
- NVDA shares rose 1.09% to $230.86, near their 12-month high of $236.54.
- Nvidia authorized an additional $150 billion share buyback, bringing total capacity to $235 billion through 2028.
- The company posted Q2 revenue of $96.22 billion, up 106% year over year, beating estimates.
- Analysts hold a consensus “Buy” rating with an average price target of $324.14.
Nvidia (NVDA) climbed 1.09% to $230.86 on Friday after Morgan Stanley reinstated the chipmaker as its top semiconductor pick. The stock sits close to its 12-month high of $236.54.
Analyst Joseph Moore made the call after meeting with CEO Jensen Huang, CFO Colette Kress and investor relations head Toshiya Hari in New York and Boston. He said the stock trades at just 15 times Morgan Stanley’s fiscal 2028 earnings estimate.
That’s a cheap multiple for a company this central to the AI buildout. Moore noted there’s room for it to expand if AI enthusiasm returns, though he says that’s not required for the stock to keep working.
Where the Growth Is Really Coming From
Moore pointed out something investors often miss. While 90% of investor conversations focus on the biggest hyperscalers and frontier model companies, half of Nvidia’s business comes from elsewhere.
That includes a broader mix of AI model companies, Neoclouds, sovereign entities, ODMs, OEMs and enterprise customers. Moore called this the faster-growing half of the business.
Nvidia also lists 80 cloud partners, with 55 of them based outside the U.S. That spread gives the company flexibility to expand wherever power and data center capacity are available.
Morgan Stanley also flagged a shift in the AI bottleneck. It’s moving away from chip production and toward how quickly new data center space can get built and financed.
That plays directly to Nvidia’s strengths. The firm expects the company’s 2028 Feynman architecture to push revenue per gigawatt from $40 billion to well above $50 billion.
Buybacks, Earnings and Insider Selling
Nvidia’s board authorized an additional $150 billion share buyback on September 28th. That brings total repurchase capacity to $235 billion through 2028, letting the company buy back up to 2.8% of its stock.
Buyback plans like this often signal leadership believes shares are undervalued. The timing lines up with Morgan Stanley’s renewed bullish call.
On the earnings side, Nvidia beat expectations last quarter. The company posted $2.22 EPS against a consensus estimate of $2.09, with revenue up 106% year over year to $96.22 billion.
There’s been some insider selling too. Director Mark A. Stevens sold 622,239 shares in September at an average price of $231.62, while EVP Timothy S. Teter sold 30,460 shares at $222.80 under a pre-arranged trading plan.
Institutional investors still own 65.27% of the company. Pension & Wealth Management Advisors Inc. recently grew its stake by 12.7%, now holding 21,362 shares worth $4.27 million.
Barclays separately raised its 2027 hyperscaler revenue estimate for Nvidia to roughly $401 billion, up from $370 billion. Cantor Fitzgerald reaffirmed an overweight rating with a $350 price target.
Not every voice is bullish. Some investors are watching Nvidia’s financing arrangements with AI customers, which critics describe as potentially circular, and are keeping an eye on customer credit quality.
China’s push to build software for Huawei’s competing AI chips remains a longer-term question mark too. For now, analysts hold a consensus “Buy” rating on NVDA with an average price target of $324.14.
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