Next week’s focus: “Nvidia earnings report.” Morgan Stanley: It will be the strongest in recent quarters, breaking the perception of “peak growth.”

Morgan Stanley raises Nvidia’s price target to $220. Analysts expect Nvidia’s upcoming third-quarter earnings report to be a breakthrough quarter, likely dispelling market perceptions that its growth has peaked. According to ZF Trading Desk, Morgan Stanley analyst Joseph Moore stated in a November 14 report that industry research indicates demand is seeing substantial acceleration, Nvidia has fully resolved early rack-related issues, while demand continues to surge. Currently, growth bottlenecks are mainly on Nvidia’s supply side, as well as with supporting hardware (storage, servers), and space/electricity constraints, but these should not slow the clear trend of demand acceleration. The ramp-up into full mass production of Blackwell chips will be a key driver. Nvidia’s positive remarks at the GTC conference have further reinforced this trend. Morgan Stanley believes that next week’s earnings will be Nvidia’s strongest quarter in recent periods. Although Nvidia’s stock has performed well, it has lagged AI peers and is expected to reverse that trend. Supply and demand data indicates demand is accelerating beyond expectations Industry research from Morgan Stanley shows that both Nvidia clients and suppliers are indicating accelerated growth in Q3 demand signals, in stark contrast to the widely-held market view that Nvidia’s growth indicators have peaked. On the client side, cloud service capital expenditures for Q3 are expected to be raised to $142 billion, with each of the four major hyperscale cloud providers upping their spending by more than $20 billion. Compared to the dollar growth in 2025, this now stands at $115 billion, up 60% from the previous quarter. From the supplier perspective, ODM manufacturer Quanta expects its AI server revenue to accelerate in Q1 2026, with year-on-year growth exceeding 100%. To support this demand, Quanta plans to double AI server capacity next year, as order visibility has now stretched to 2027. Blackwell chips become core growth engine Morgan Stanley has raised its October revenue forecast for Nvidia from $54.4 billion to $55 billion, and its January forecast from $61.2 billion to $63.1 billion. Analysts note that October and January could each see $8 billion in sequential quarterly growth, setting an industry record. Blackwell chips remain the top choice for AI chips, with very strong demand signals for Vera Rubin. Although competitors are showing enthusiasm, this is a reflection of progress and the strong underlying market demand. Nvidia CEO Jensen Huang previously stated that revenue over the next five quarters needs to rise to the $70–80 billion range (Morgan Stanley raised this by $22 billion), and currently, the share price is 10% below its peak after Huang made the statement. Morgan Stanley has raised its Nvidia fiscal year 2027 forecast from $278 billion in revenue/ $6.59 non-GAAP EPS to $298.5 billion/ $7.11 EPS. Analysts believe the company could provide even higher guidance due to the strength of its order backlog, which mainly depends on how conservative it remains in a strong demand environment. The new $220 price target is based on a 26x P/E ratio using ModelWare’s FY2027 EPS forecast of $8.43, or about 25x non-GAAP P/E. This valuation is at a discount to the two-year average forward P/E (32x) and two-year P/E (28x), reflecting expectations of slowing growth, and is also at a discount to major AI semiconductor peer Broadcom. Risk warning and disclaimer The market has risks, and investments require caution. This article does not constitute individual investment advice and does not take into account the specific investment objectives, financial situation, or needs of any particular user. Users should consider whether any opinions, views, or conclusions in this article are appropriate to their situation. Investing based on this information is at your own risk.