<div id="readability-page-1">Over the three years since ChatGPT burst onto the scene, generative AI has been behind some of tech's biggest market wins. Chip stocks have been right at the heart of those gains, as the AI boom has created massive demand for the high-performance processors that train models and run data centers. That wave of spending has helped push Nvidia to the top of the pyramid, with a market cap now standing above $4.5 trillion.<h3>Claim 70% Off TipRanks This Holiday Season</h3><ul><li>Unlock hedge-fund level data and powerful investing tools for smarter, sharper decisions </li><li> Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential</li></ul> But as the gains pile up, one worry is starting to surface: is this still a revolution in the making – or the early signs of an AI bubble? Morgan Stanley analyst Joseph Moore isn't backing away. He remains firmly in the bullish camp heading into 2026, noting: &#34;While we understand longer term skepticism on AI, we believe that 2026 will remain strong maintaining good visibility in 2027. That's good for AI semis stocks, but the next leg of growth is more positive for memory and fab utilization, leading to a broader group of outperformers.&#34; Getting into specifics, the 5-star analyst names industry leaders Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO), as well as the smaller player Astera Labs (NASDAQ:ALAB), as stocks investors should buy. Let's give these Strong Buy stocks a closer look, to find out why Morgan Stanley has picked them despite all the bubble talk. Nvidia We'll start with Nvidia, the undisputed heavyweight of the semiconductor world. The chipmaker has been one of the biggest winners of the AI boom, a run that has made it the most valuable public company on Wall Street. Nvidia has built its recent successes on its ability to supply the high-capacity processing chips required by AI-adjacent apps and data centers. The company recently reported that the latest iteration of its popular Blackwell family, the RTX PRO 5000 72GB Blackwell GPU chip, is now 'generally available.' The new chip offers a 50% increase in memory from the 48GB model, and according to the company, presents AI developers with the option &#34;to train, fine-tune, and prototype larger models locally.&#34; Also of interest, considering President Trump's tariff dust-ups and his aggressive trade stance toward China earlier this year, it was announced this month that Tencent, the Chinese tech giant, now has access to Nvidia's Blackwell GPU chips. Though the export of these chips is restricted to Chinese companies, Tencent is accessing these advanced chips through a Japanese cloud computing service. These announcements are only the tip of the iceberg when it comes to Nvidia's AI-powered successes. The company's last quarterly report, released in November for fiscal 3Q26, sheds additional light. In that fiscal quarter, Nvidia reported a top line of $57 billion, for a 62% year-over-year increase, which beat the forecasts by $1.91 billion. Nvidia reported that its AI-related Data Center business was a main driver of the top-line gains, and was up 66% year-over-year to reach $51.2 billion. Data Center revenue made up almost 90% of Nvidia's total top line during fiscal 3Q26. Income was also solid. Nvidia's non-GAAP EPS figure for the quarter, of $1.30, was 4 cents better than expected and was up 60% from the prior-year period. Joseph Moore, in his notes for Morgan Stanley, lays out a case for Nvidia to realize continued gains going forward, writing, &#34;Nvidia continues to execute at a very high level, growing revenues sequentially by $10bn ($3bn above guidance) in October, and guiding for another $8bn in January. With hundreds of billions of demand (and climbing) still yet to be served, we expect the stock to go higher as AI sentiment stabilizes. Rubin will be the most important product cycle of the year in semiconductors, and we expect it to extend Nvidia's leadership technology position and give investors confidence in ongoing pricing power. With Nvidia at a high teens multiple on 2027 numbers that continue to move higher, we think valuation can be the starting point for Nvidia to make up some of the lost ground vs large cap AI semis peers…&#34; Moore puts an Overweight (i.e., Buy) rating on the AI chip stock, and a $250 price target that suggests a gain of 32% in the next 12 months. (To watch Moore's track record, click here) Overall, NVDA shares have a Strong Buy consensus rating based on 41 recent analyst recommendations. These include 39 to Buy against just 1 each to Hold or Sell. The stock is priced at $188.71 currently, and its $263.58 average price target implies a one-year upside potential of ~40%. (See NVDA stock forecast) </div>

Morgan Stanley analyst Joseph Moore recommends Nvidia, Broadcom, and Astera Labs as top chip stocks for 2026, citing strong AI demand. Despite concerns of an AI bubble, Moore remains bullish, highlighting Nvidia's recent successes and future growth potential. Nvidia's AI-related Data Center business drives significant revenue growth, with Moore predicting continued gains and a 32% stock price increase. NVDA shares have a Strong Buy consensus rating, with a current price of $188.71 and a target of $263.58, indicating ~40% upside potential.

- Generative AI has driven significant market gains, particularly in chip stocks, with Nvidia's market cap exceeding $4.5 trillion.  
- Analyst Joseph Moore from Morgan Stanley remains bullish for 2026, highlighting Nvidia and Broadcom as top stocks and expecting continual revenue growth from AI semiconductors.  
- Nvidia's recent quarterly report shows a 62% revenue increase, largely from AI-driven data center sales, reinforcing its status as a leader in the semiconductor industry.

Morgan Stanley Picks NVDA, AVGO, and ALAB as Top Chip Stocks for 2026