Buy weakness in Nvidia stock – Morgan Stanley
The recent market downturn hasn’t spared chipmakers, with the S&P 500 experiencing a correction and many chip makers, such as Nvidia (NASDAQ:NVDA) Stock taking a hit. However, amidst the broad sell-off, Morgan Stanley sees an opportunity.
Nvidia stock slumps
Nvidia’s stock price closed last week at $762 per share after a 10% decline in Friday’s session, taking it to its lowest level since February 22, 2024. The sell-off in artificial intelligence (AI) and chipmaker stocks was in part driven by Super Micro Computer (NASDAQ:SMCI) announcing its next earnings date without giving preliminary results, as well as disappointing updates from Taiwan Semiconductor Manufacturing (NYSE:TSM) and ASML (AS:ASML).
Analysts at Citi said it believes “some semi stocks will likely struggle given mixed results and a pause in the increased AI forecasts which drove the group from January to last month.”
“We continue to believe some semis will face a headwind until June/July when it could become apparent estimates are about to go up again and we believe this is a buying opportunity for our buy-rated names,” added the bank.
Even so, Bank of America Securities said US semiconductor stocks have been dented but not deterred. The firm remains constructive on chip stocks as it believes “we are only in quarter 3 of what is usually an average 10 quarter upcycle.”
BofA highlighted aspects such as the stagflation risk, rising rates, geopolitical worries, AI fatigue and an uninspiring near-term outlook from leaders TSM and ASML as factors weighing on chip stocks.
According to Morgan Stanley, concerns that GPU shortages are easing—which have been a factor for the last few months—continue to create anxiety.
“As we have written, we think that the shortages easing is a function of supply growth outgrowing the AI ecosystem, and also reflects the product transition to Blackwell starting just a few months from now,” said Morgan Stanley.
Morgan Stanley reiterates buy on Nvidia stock
Despite the sell-off, Morgan Stanley remains bullish on Nvidia’s stock, stating it remains buyers of the stock following last week’s sell-off, reiterating an Outperform rating on the stock
Morgan Stanley notes that as Blackwell ramps, starting in August, it is likely to be in short supply for several quarters.
“This still leaves Hopper doing some heavy lifting through early 2025 as we still see the majority of revenue from Hopper until next year, and there is, of course, some anxiety about a Blackwell pause,” wrote the bank. “But we simply are not hearing about that right now, as our contacts assure us that Hopper demand continues to grow and that the company can manage the transition to Blackwell effectively.”
Morgan Stanley likes the Nvidia setup, given that there is concern about a pre-Blackwell pause, and they don’t expect such a pause.
This means that if numbers continue to be good, “the stock is unlikely to be held back by excessive near-term expectations, and even if there is a pause because Blackwell demand seems so robust, it does not seem to be a reason to sell the stock,” said Morgan Stanley.
Furthermore, there is confidence that the NVIDIA customers, such as Tesla (NASDAQ:TSLA), that are served through multiple OEMs are stronger than was expected a few weeks ago.
News Related
-
Anyone who’s purchased gift baskets to hand out to loved ones this holiday season might need to find a backup present after the latest food recall that involves festive cookies. Gift basket company Wine Country Gift Baskets just announced that it is voluntarily recalling all gift baskets that feature Acorn Baking ...
See Details:
Recall Just Announced For Popular Cookies Featured In Holiday Gift Baskets
-
LOS ANGELES: Quarterback Jalen Hurts ran in an overtime touchdown to give the Philadelphia Eagles a 37-34 NFL win over the Buffalo Bills Sunday (Monday in Manila) and move them to 10-1 on the season. The Eagles, who lost the Super Bowl to Kansas City last season, trailed at half-time ...
See Details:
Eagles rally past Bills in overtime as Chiefs win
-
Yen Makabenta First word WHILE UN Secretary-General Antonio Guterres and other promoters of the climate emergency are preparing to convene the 28th conference of the parties (COP28) of the UN Framework Convention on Climate Change (UNFCCC) in the United Arab Emirates, starting on November 30 and stretching to December 12, ...
See Details:
Reality bites the green energy agenda
-
Sandigan orders Marcos Sr. pal to pay workers The Sandiganbayan has ordered the enforcement of a July 2023 ruling ordering a Marcos Sr. associate to pay a lumber company’s workers P2.1 million in damages as well as return 60 percent of their company’s shares and pay all unpaid benefits. The ...
See Details:
Sandigan orders Marcos Sr. pal to pay workers
-
DSWD: Shear line, LPA affect 1.2 million people; over 18,000 families evacuated MANILA, Philippines – More than 18,000 families have fled to evacuation centers across flood-affected regions in the country due to the impact of the shear line and low pressure area. Department of Social Welfare and Development (DSWD) gave ...
See Details:
DSWD: Shear line, LPA affect 1.2 million people; over 18,000 families evacuated
-
-
MANILA, Philippines: The entire Luzon, including Metro Manila, is expected to experience isolated rain showers and thunderstorms as the northeast monsoon (“amihan”) and easterlies will be affecting the country over the next 24 hours, the state-run weather agency said on Tuesday. Weather specialist Patrick del Mundo of the Philippine Atmospheric ...
See Details:
Rain showers, thunderstorms over Luzon, including Metro Manila — Pagasa
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
'Naruto' live-action film adaptation is in the works
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
NASA Highlights Stingray Nebula
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
Manila's Lagusnilad underpass opens
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
China probes debt-ridden financial giant
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
China's VUCA situation
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
Unraveling the mystery that is diabetes
-
Attention, Naruto fans! You can soon watch the famous anime’s live-action adaptation as it finally has a confirmed writer. According to a Variety report, the beloved manga and anime series is set to head to big screens for its live-action adaptation under Lionsgate. It will be written by Tasha Hao, ...
See Details:
Bangladesh's nuke plant is not going to steal PH investments
OTHER NEWS
ALIW Awards Foundation Inc. President Alice H. Reyes has released the names of finalists for the 2023 Aliw Awards to be presented on Dec. 11, 2023, at the Manila Hotel ...
Read more »
WhatsApp Web gains the feature of single-view photos and videos (Photo: Unsplash) The WhatsApp Web, the desktop version of the popular messaging app from Meta, has received an update allowing ...
Read more »
Young athletes’ time to shine in Siklab Awards MANILA, Philippines — The future heroes of Philippine sports will be honored during the third Siklab Youth Sports Awards on Dec. 4 ...
Read more »
Graphics by Jannielyn Ann Bigtas A local government official said Monday that five to 10 barangays in Northern Samar are still isolated following the massive flooding in the area last ...
Read more »
DyipPay app lets you pay jeepney fare, book tricycles “Barya lang po sa umaga.” Everyone who rides jeepneys knows this rule: it may not be an actual law, but it’s ...
Read more »
Updated In-Season Tournament Bracket ahead of pool play finale Tuesday will mark the last day of pool play for the inaugural NBA In-Season Tournament. From there, six first-place teams and ...
Read more »
PCG forms teams for maritime emergency response MANILA, Philippines — Recent incidents of fishermen lost in the waters off Southern Tagalog have prompted the Philippine Coast Guard (PCG) to form ...
Read more »