Morgan Stanley expects NVIDIA's revenue growth to improve next year, raising the target price to $265

JP Morgan published a research report indicating that NVIDIA (NVDA.US) showed robust performance for the fourth fiscal quarter ending January and solid operational guidance for the first fiscal quarter ending April, both exceeding market expectations. The revenue guidance for the first fiscal quarter is approximately $5 billion higher than the general market forecast, while the recent gross margin guidance remains firmly at a mid-high level of 74% to 75%.

JP Morgan noted that the stock price performance reflects high investor expectations, which they believe is related to the market's ongoing focus on NVIDIA's data center business growth prospects for next year. They anticipate that quarterly revenue will continue to show sequential growth through fiscal year 2027, driven by strong demand for inference-driven computing, and believe that AI agents will become a new demand driver.

Management has indicated that discussions with customers and the progress of order signing are going smoothly, and there are no concerns about growth prospects for next year. JP Morgan is optimistic about NVIDIA's steady revenue growth for fiscal year 2027, raising the target price from $250 to $265, maintaining an "Overweight" rating