Nvidia Reinstated as Top Pick with 85% AI Share and 18x 2027 Valuation
Morgan Stanley reinstated Nvidia as its top semiconductor pick, citing its 85% AI processor revenue share and customers prepaying into 2028 with 80% spending jump in 2026. It noted upcoming product updates, easing GPU supply constraints and an 18x 2027 earnings valuation following a 38% forecast rise over six months.
1. Morgan Stanley Reinstates Nvidia Top Pick
Morgan Stanley analyst Joseph Moore reinstated Nvidia as the firm’s top semiconductor pick, marking a shift from earlier memory stock preference. The firm highlighted that Nvidia’s business fundamentals have strengthened despite flat share performance, driven by robust AI spending commitments.
2. Market Share and Customer Commitments
Nvidia holds roughly 85% of AI processor revenue, dwarfing ASICs at just over 10% and AMD under 5%. Supply-chain checks show hyperscale customers prepaying into 2028, with Nvidia-related spending projected to rise 80% in 2026.
3. Valuation, Updates and Supply Outlook
The stock trades at about 18 times projected 2027 earnings, an entry point Morgan Stanley views as attractive after earnings forecasts climbed 38% over six months. Easing GPU supply constraints and upcoming product launches could further bolster Nvidia’s market share gains.