Nvidia Stock Climbs as Power Crunch Fails to Shake 2027 Outlook

Shares of Nvidia (NVDA) climbed 1.4% to $242.27 on October 6, extending gains from the previous trading session. The rise comes as concerns about electricity shortages threaten the expansion of AI infrastructure. Despite these challenges, Morgan Stanley does not expect power constraints to disrupt Nvidia's 2027 forecasts.

The bank estimates that U.S. data-center developers will face a 32-gigawatt net power shortfall through 2028, even after accounting for alternative energy sources. Morgan Stanley argues that Nvidia's deep understanding of chip destinations and strong coordination with customers provide some protection against these bottlenecks. Memory and optical suppliers, however, may experience greater delays in deployment.

Nvidia's valuation remains significantly below its estimated worth, with shares trading at a 39.93% discount to the $403.34 GF Value estimate. While this discount suggests potential upside, it does not guarantee the gap will close. The company's recent performance highlights the critical role of power availability, with $89 billion in quarterly data-center revenue accounting for roughly 92.5% of its $96.2 billion total revenue.

Morgan Stanley's assessment offers some reassurance, but investors must remain vigilant. The key question is whether customers can successfully power new capacity on schedule. Strong demand may fill the order book, but operational readiness will determine how smoothly that demand translates into revenue.