Morgan Stanley's recent report highlights NVIDIA's (NVDA, Financial) strategic advancements presented at the Computex conference. Although the keynote did not feature major surprises, NVIDIA's path to returning to growth in the second half of the year is becoming clear. Several mid-term concerns, such as customer digestion cycles and ecosystem collaboration, are being addressed. The company is expected to see strong growth by the second half of 2025.
Key announcements included the NVLink Fusion, an enhanced interconnect technology expanding compatibility with a wider range of hardware, including custom ASICs and non-NVIDIA CPUs like those from Qualcomm and Fujitsu. This strategy is anticipated to boost communication infrastructure revenue, though its impact on ASIC competition and customer choices remains to be evaluated.
NVIDIA also unveiled the RTX PRO server for the enterprise AI inference market, capable of housing up to eight Blackwell RTX Pro Graphics 6000 cards. Updates to the Isaac GR00T model for humanoid robot training were introduced, and new products like the DGX Spark workstation and DGX Station are set for release later this year.
Morgan Stanley maintains an "overweight" rating for NVIDIA, with a target price of $160, reflecting a valuation similar to AI peer Broadcom and higher than the semiconductor industry average. NVIDIA’s stock has risen over 40% from its yearly low, closing at $135.57.
