Nvidia (NVDA) is the best way to get exposure to artificial intelligence as visibility into strong spending continues to build, Morgan Stanley said in a research note.
“Even given strong YTD appreciation, we make the case for maintaining outsized exposure to AI – and that, increasingly, Nvidia is the best way to get that exposure in our coverage,” Morgan Stanley analysts said.
Demand is particularly strong among customers working to develop systems for artificial intelligence applications, they said.
“Faced with limited slots for AI processors, we are seeing some of the appetite for alternatives taking a back seat to the highest ROI processor, which continues to be Nvidia,” the analysts said.
Nvidia has also benefitted with its product execution and has been signaling it may keep would-be competitors at bay with aggressive pricing, the report said.
Morgan Stanley reiterated its overweight rating on Nvidia while raising its price target to $1,000 apiece from $795 previously.