Nvidia(US:NVDA) Hua Er Jie Jian Wen·2025-11-16 03:46Core Viewpoint - Morgan Stanley raised Nvidia's target price to $220, anticipating that the upcoming Q3 earnings report will be a breakthrough quarter, challenging the market's perception of growth peaking [1] Group 1: Demand Acceleration - Industry research indicates a substantial acceleration in demand for Nvidia, contrasting with the market's belief that growth metrics have peaked [4] - Cloud service capital expenditure expectations for Q3 have been raised to $142 billion, with major cloud service providers increasing their spending by over $20 billion each [4] - ODM manufacturer Quanta expects its AI server revenue to accelerate growth by over 100% year-on-year by Q1 2026, planning to double AI server production capacity next year due to visible orders extending to 2027 [4] Group 2: Revenue Projections - Morgan Stanley adjusted Nvidia's revenue expectations for October from $54.4 billion to $55 billion and for January from $61.2 billion to $63.1 billion, projecting record quarterly growth of $8 billion for both months [5] - Nvidia's CEO Jensen Huang indicated that revenue needs to be in the range of $70-80 billion over the next five quarters, with the stock currently 10% lower than its peak following this statement [6] Group 3: Long-term Outlook - Morgan Stanley raised Nvidia's fiscal year 2027 revenue forecast from $278 billion to $298.5 billion and non-GAAP EPS from $6.59 to $7.11, suggesting potential for higher guidance based on strong order backlogs [8] - The new target price of $220 is based on a 26x P/E ratio of the projected $8.43 EPS for fiscal year 2027, reflecting a discount compared to the average forward P/E of 32x over the past two years [8] Group 4: Key Growth Drivers - The Blackwell chip is identified as a core growth engine for Nvidia, with strong demand signals for the Vera Rubin chip, indicating robust market demand despite competitive enthusiasm [5]