The near-term progress story for Nvidia stays promising amid ongoing demand for synthetic intelligence processors, in keeping with Morgan Stanley. The Wall Road funding financial institution raised its worth goal to $750 from $603 and reiterated an chubby funding score forward of the dominant AI chipmaker’s quarterly earnings launch set for Feb. 21. The brand new worth goal suggests about 10% upside from Nvidia’s present ranges. The chipmaker has surged 211% within the final 12 months, together with a 39% rally within the first six weeks of 2024. As Nvidia continues to climb, some traders have questioned whether or not earnings will increase sufficient to justify the rally, particularly amid reviews of order cuts late final yr, and if the inventory’s march larger is sustainable. NVDA 1Y mountain Nvidia shares during the last 12 months “We continue to see a very strong near term picture, and think that various second derivative anxieties are missing the bigger picture,” Morgan Stanley analyst Joseph Moore wrote in a Wednesday word. “AI demand continues to surge.” Moore added that the inventory started this yr buying and selling under 25 instances trailing-price-to-earnings, “a level that the stock has only seen a handful of times in the last several years.” “General concerns about over earning and reports of order cuts at key customers in November and December compressed the multiple,” Moore stated. “We don’t expect that kind of setup again soon as expectations for upside in the quarter may quickly turn to sustainability concerns once the numbers are out — a pattern we have seen the last few earnings reports for NVDA.” Nvidia stays in a robust place and is snug with the aggressive dynamic within the chips market, in keeping with Moore. The analyst is extra cautious on his 2025 estimates, which he known as a “tougher call.” “Longer term, cloud commentary is encouraging, but we do continue to budget for a plateau in 2025,” Moore stated. Subsequent yr might see some consolidation of huge language mannequin initiatives at present in improvement, he famous. —CNBC’s Michael Bloom contributed to this report.