Nvidia stock remains top pick for 2025: MS
Morgan Stanley (NYSE:MS) reaffirmed Nvidia (NASDAQ:NVDA) as a top stock pick for 2025, maintaining its Overweight rating and a price target of $166.
Despite some near-term headwinds, including a slowdown in Hopper builds and staggered Blackwell product readiness, Morgan Stanley views these challenges as temporary.
By the second half of 2025, the strength of Blackwell will be “the only topic,” the firm’s analysts stressed.
Addressing competitive pressures from ASIC solutions, particularly from Marvell (NASDAQ:MRVL) and Broadcom (NASDAQ:AVGO), Morgan Stanley believes purchasing trends will favor GPUs over time.
“While our forecasts for both AVGO/MRVL ASIC revenue are largely conservative, as are our forecasts for GPU, we believe that GPU will meaningfully outperform ASIC this year,” analysts noted.
The report also highlights Nvidia’s $12 billion annual R&D investments as critical for maintaining its leadership in AI hardware and system-level innovations.
Analysts also addressed the concerns over industry challenges, including scaling Artificial General Intelligence (AGI) clusters.
While technologists advocate for larger AGI systems, financial backers remain cautious about return on investment (ROI). Nvidia’s innovations, such as Mellanox (NASDAQ:MLNX) and NV-Link, are positioned to improve efficiency in this area.
Nvidia’s growth drivers—including inference, sovereign AI training, and enterprise applications—account for 70% of its data center revenue. Analysts believe these segments will continue driving growth even amid potential industry consolidation by 2026. “Even with some consolidation in the arms race, we should still see enduring growth potential,” they commented.
The upcoming Consumer Electronics Show (CES) in January 2025 is expected to boost sentiment for Nvidia. Analysts anticipate the messaging will emphasize strong Blackwell demand, albeit with supply constraints.
“But by mid year we remain comfortable that the focus will remain on Blackwell which will be the driving force behind revenue in 2h, potentially unlocking more significant upside,” the note concluded.
Tesla stock remains the “narrative king”, Barclays says
Tesla (NASDAQ:TSLA) has experienced an extraordinary rally since the U.S. election, solidifying its status as the market's "narrative king," according to analysts at Barclays (LON:BARC).
The electric vehicle (EV) maker's shares have surged approximately 90%, adding about $730 billion to its market capitalization - a feat matched only by a few tech giants like Nvidia and Apple (NASDAQ:AAPL).
Barclays notes that this performance is particularly remarkable given the stock's apparent disconnect from underlying fundamentals. Tesla's price-to-earnings (P/E) ratio has soared from 80x before the election to an elevated 145x based on 2025 consensus EPS estimates.
“The decoupling from fundamentals in many ways mirrors the rally we saw from Tesla in 2020-21," analysts led by Dan Levy said in a note.
They attribute this rally to the "magnification of Tesla's narrative command," which centers around themes like autonomous vehicles (AV) and AI.
Another factor contributing to the surge is the "Tesla-financial complex," where options activity amplifies stock movements. Moreover, retail investor interest remains robust, with 30% of Tesla's outstanding shares held by individual investors, according to Barclays.
“Tesla remains the 'OG meme stock,'” the analysts emphasized.
