Morgan Stanley Raises NVIDIA Target to $300 Amid Contingent Exposures Growth
Morgan Stanley has released a research report evaluating NVIDIA's (NVDA.US) 'Balance Sheet-as-a-Service' from a cross-asset perspective. The report argues that NVIDIA is increasingly leveraging its robust balance sheet to support AI infrastructure financing. Zhitong Finance APP reports that equity investments, prepayments, leasing arrangements, residual value support, unsold capacity commitments, and revenue-sharing agreements are becoming key mechanisms for ecosystem compute financing.
The report's core views are divided into two main segments: equity and credit. For the equity segment, Morgan Stanley assigns an 'Overweight' rating to NVIDIA with a target price of $300. Analyst Joseph Moore believes that strong quarterly performance has laid a more favorable foundation for future trends.
Moore points out that the Rubin architecture allows NVIDIA to regain narrative control compared to Grace Blackwell Ultra, offering a 30-fold increase in throughput per megawatt and a 35% reduction in token costs. Additionally, the opportunity size per gigawatt has risen from $18 billion for Hopper to $25 billion for Blackwell and further to $40 billion for Vera Rubin.
Management's commentary on fiscal year 2028 is also highly positive, with approximately 70% of revenue growth remaining severely constrained by supply. NVIDIA is positioned to capture higher value with a richer product lineup, including networking solutions, Groq, and Vera.