Morgan Stanley has reinstated Nvidia (NVDA) as its top semiconductor pick, replacing Micron, with a $260 price target and an Overweight rating. This move comes as analysts remain overwhelmingly bullish on the chipmaker's AI-driven future. The firm's 12-month average price target stands at $271.11, implying roughly 48% upside from recent levels.
Nvidia's financial performance underscores the optimism. Over the past 12 months, the company posted 65% revenue growth, reaching $216 billion, with a striking 60.4% operating margin. Quarterly revenues hit $68 billion in the most recent quarter, up 73.2% year-over-year. The company maintains a strong balance sheet with $63 billion in cash against $11 billion in debt.
Analyst confidence is high. UBS analyst Timothy Arcuri reiterated a Buy rating on March 2 with a $245 price target, following a meeting with Nvidia CFO Colette Kress. Key discussion points included networking growth and long-term margin outlook, with management indicating hyperscale customers are planning compute buildouts through 2027.
Simultaneously, billionaire investor Leo KoGuan, a major Tesla shareholder, made a high-profile $180 million bet on Nvidia, purchasing 1 million shares. KoGuan announced the move on X, stating he is "convinced AI is NOT a bubble" and framed his investment around ambitious concepts like AGI and Singularity. This acquisition is part of a strategic portfolio shift where he has trimmed Tesla exposure and moved some funds into short-term U.S. Treasury bills for market protection.
Despite the bullish signals, Nvidia shares faced near-term pressure, sliding about 1.5% following KoGuan's announcement. Analysts point to reliance on a few major Big Tech customers for nearly half of its data center revenue and valuation concerns. The stock is down 5.4% over the past seven days, though it remains up 60% over the past year.
The investment community is divided. KoGuan's bullish stance contrasts with other investors like Peter Thiel, whose Thiel Macro LLC exited all Nvidia positions, citing concerns over an AI-driven market bubble. This highlights the uncertainty surrounding AI stock valuations.
All eyes are now on Nvidia's GTC conference scheduled for March 16–19. Investors expect updates on product timelines and clarity on AI hardware demand trends. Industry checks indicate major customers plan to increase Nvidia-related spending in 2026.
