Nvidia Valuation Seems 'Perplexing', Says KeyBanc Analyst — Morgan Stanley Is Now 'More Bullish' On NVDA After Computex

• Vinh said that Nvidia is still the best-in-class AI chip play in the sector, and that he does not think anyone could meaningfully catch up with the company in the merchant silicon side.
• Morgan Stanley stated that its meetings with Nvidia management during Computex reinforced its optimistic outlook on the company's leadership in AI-focused GPUs and its expanding CPU business.
• The firm noted that Nvidia remains the best value among processor stocks, while maintaining its ‘Overweight’ rating and $288 price target.

Nvidia Corp.’s (NVDA) current valuation seems “perplexing,” according to KeyBanc Capital Markets senior research analyst John Vinh, who backed the company as the best-in-class AI chip play.

During an interview with CNBC, Vinh said that Nvidia remains the firm’s favorite in the AI chip sector due to its risk-reward ratio.

“Nvidia is still hands down the best-in-class AI chip play in the sector. I don’t think anyone is going to be able to, on the merchant silicon side, gain meaningful traction versus Nvidia anytime soon,” he added.

Nvidia shares were down nearly 1% in Thursday’s opening trade.

Morgan Stanley's More Bullish’ On NVDA After Computex

According to TheFly, Morgan Stanley analysts said in a note on Thursday that they are “more bullish” on Nvidia following its keynote at the ongoing Computex conference in Taiwan.

The firm said its meetings with Nvidia management during Computex reinforced its optimistic outlook on the company's leadership in AI-focused GPUs and its expanding CPU business.

Morgan Stanley added that Nvidia remains the best value among processor stocks, while maintaining its ‘Overweight’ rating and $288 price target.

NVDA Unveils AI Chip For Windows Laptops, PCs

Nvidia on Sunday unveiled a new AI chip, RTX Spark, that will power laptops and personal computers running Microsoft Corp.’s (MSFT) Windows. The RTX Spark superchip combines an Nvidia Blackwell RTX GPU with 6,144 CUDA cores and fifth-generation Tensor Cores, paired with a 20-core Grace CPU.

“RTX Spark brings everything NVIDIA has built — CUDA, RTX, our AI platform — into a single superchip. Local agents. Frontier models. Creative workflows. RTX games. All on a laptop. This is the new PC. The personal AI computer,” said Nvidia CEO Jensen Huang.

How Did Retail Traders React To NVDA Stock?

Retail sentiment on Stocktwits around Nvidia trended in the ‘bullish’ territory at the time of writing.

One user believes that NVDA stock could rise above $300 by the end of this year.

NVDA stock is up 15% year-to-date and 52% over the past 12 months. The S&P 500 ETF (SPY) is up 27% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 41%.

The State Street Technology Select Sector SPDR ETF (XLK) is up 66% during this period, while the iShares Semiconductor ETF (SOXX) is up 188%.

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