Morgan Stanley dismissed fears of an AI slowdown as “laughable” on Friday. The bank remains optimistic about the sector despite concerns about reduced investments in AI by companies. Analyst Joseph Moore pointed to comments from industry leaders like OpenAI’s Sam Altman and Alphabet’s Sundar Pichai as evidence that AI companies still urgently need GPU chips.
Moore explained that while Wall Street worries about various concerns, Silicon Valley is focused on a different challenge – the rapid growth in tokens generated is stressing the ecosystem and driving a surge in investment to handle those workloads. AI stocks have generally performed poorly this year. The debut of DeepSeek’s efficient large language model in January sparked fears that cloud hyperscalers might need fewer GPU chips from Nvidia, stoking AI bubble fears.
These concerns intensified following policy changes in early April. Shares of prominent AI companies have plunged up to 28% since late January.
Morgan Stanley bullish on Nvidia’s future
However, Moore remains positive about Nvidia amidst these fluctuations. He acknowledged that supply constraints and export restrictions on Nvidia’s H20 chips might limit near-term revenue growth. Yet, he projects significant growth for the company once these issues are resolved, particularly by 2026.
“NVIDIA had almost no revenue for Blackwell in October, did $11 billion in January, and is likely well over $30 billion in the current quarter,” Moore said, expecting this growth trajectory to continue. Moore increased his 2026 revenue and earnings per share estimates for Nvidia by 10.7% and 11.9% respectively. He reinforced his “Overweight” rating on Nvidia with a $160 price target—representing a 45% potential upside from current levels.
Morgan Stanley remains confident that demand for AI and associated technologies, especially inference chips, will keep growing. The bank shrugs off any notion of an AI slowdown as an overblown concern.
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Noah Nguyen is a multi-talented developer who brings a unique perspective to his craft. Initially a creative writing professor, he turned to Dev work for the ability to work remotely. He now lives in Seattle, spending time hiking and drinking craft beer with his fiancee.
