‘This Changes the AI Cost Game,’ Says Morgan Stanley on Nvidia Stock (NVDA)

Nvidia NVDA +1.65% ▲ , the AI chip leader, remains a “top pick” at Morgan Stanley, as the firm said the company still has a clear edge where it matters most — cost and performance.

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After the company’s GTC 2026 keynote, top analyst Joseph Moore reiterated his Overweight rating on the stock with a $260 price target, pointing to strong demand and a growing lead in AI infrastructure. He said that the shift to “inference” is accelerating, and Nvidia is leading this transition.

It is worth noting that Moore ranks 214 out of more than 12,000 analysts tracked by TipRanks. He has a success rate of 57%, with an average return per rating of 20.80% over a one-year timeframe.

Nvidia’s Edge Is Getting Harder to Ignore

Morgan Stanley said Nvidia’s biggest advantage is not just speed, but cost per AI output, also known as cost per token. The firm noted that Nvidia’s systems are already leading on this metric, and the gap could widen further with its next-generation Vera Rubin platform.

In simple terms, companies can generate more AI output for the same cost — a key reason why customers often return to Nvidia even after testing competing chips.

The analyst also pointed out that demand for AI computing has surged sharply, with requirements rising dramatically as companies move from building AI models to actually using them in real-world tasks.

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The $1 Trillion Signal Still Has Room to Grow

Another major takeaway was Nvidia’s visibility into about $1 trillion in demand for its Blackwell and Vera Rubin systems through 2027.

Morgan Stanley believes this number could still be conservative. In fact, the firm estimates total data center revenue tied to this cycle could reach around $1.1 trillion, higher than current market expectations.

Why the Analyst Still Sees Upside

Despite Nvidia’s strong run, Morgan Stanley believes the stock still has room to move higher.

The firm expects:

• AI spending to stay strong through 2027

• Nvidia’s market share to remain stable

• Earnings estimates to move higher over time

It also noted that concerns about competition from custom chips or rivals like Advanced Micro Devices AMD +1.65% ▲ may be overstated, especially as Nvidia continues to improve performance with new systems like Rubin and Groq integration.

Is NVDA Stock a Buy after GTC 2026?

Nvidia’s stock has a consensus Strong Buy rating among 39 Wall Street analysts. That rating is based on 38 Buy and one Hold recommendations issued in the past three months. The average NVDA price target of $273.61 implies 49.33% upside from current levels.

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