Reviewed by Gotrade Internal Analyst
Gotrade News - Two of Wall Street's biggest names, Morgan Stanley and Bank of America, are both sticking with their bullish outlook on Nvidia ahead of its fourth-quarter earnings report scheduled for Tuesday (02/25). The move reinforces expectations that Nvidia's performance remains the key bellwether for the broader AI trade in global markets.
Morgan Stanley has set a $250 price target with an overweight rating, while Bank of America is even more aggressive at $275 with a buy rating. Both projections signal strong conviction that Nvidia's revenue growth hasn't shown any meaningful signs of slowing down.
Key Takeaways
- Morgan Stanley expects Nvidia's Q4 revenue to beat guidance by $2 billion or more above the $64 billion target
- Bank of America has raised its sales and EPS estimates for Nvidia, setting the Street-high price target at $275
- The transition from Blackwell to Vera Rubin architecture is moving faster than initially expected, serving as a potential catalyst
Morgan Stanley analyst Joseph Moore expressed high confidence in Nvidia's Q4 results across the board. According to a Morgan Stanley research note reported by The Street, Moore sees revenue coming in at least $2 billion above the $64 billion guidance.
Moore also noted that the consensus revenue estimate of $72 billion for the full fiscal year looks pretty safe. That figure is backed by last quarter's blowout performance, which came in nearly $3 billion above guidance with $10 billion in sequential revenue growth.
Vera Rubin Transition Picking Up Steam
One of the biggest catalysts flagged by Morgan Stanley is the accelerating shift to the Vera Rubin architecture. Moore expects the Vera Rubin ramp to land roughly on time, with potential for an even steeper supply curve than originally anticipated.
The pivot from Blackwell to Rubin in the second half of this year has been happening faster than earlier projections suggested. This gives better visibility into GPU demand, which remains robust across all segments of AI compute.
On valuation, Moore pinned his $250 target on a 26x multiple of his calendar year 2027 EPS estimate of $9.57. He argued that this still represents a discount compared to Broadcom, even though Nvidia should arguably trade at a premium.
Wall Street Is Singing the Same Tune, but Risks Linger
Meanwhile, Bank of America analyst Vivek Arya has also bumped up his sales and EPS estimates for Nvidia. According to The Street, BofA's $275 price target is based on a 28x price-to-earnings ratio excluding cash for calendar year 2027.
That multiple still sits within Nvidia's historical forward PE range of 25x to 56x. In other words, BofA's valuation hasn't even pushed past the stock's historical ceiling.
Despite the optimism, both banks flagged several risks worth keeping an eye on. Morgan Stanley highlighted the possibility that AI end markets don't pan out as expected, along with the chance that AMD re-emerges as a serious GPU competitor.
Bank of America added concerns around chip export restrictions to China and potential ramped-up government scrutiny of Nvidia's dominant position. These factors could become headwinds if regulatory pressure tightens going forward.
Nvidia's stock has bounced back from a sharp dip and closed at $171.88 on February 5. According to Yahoo Finance as cited by The Street, that's still well below its peak closing price of $207.04 hit on October 29.
The recovery heading into this earnings report sets up a different dynamic compared to last quarter. Back then, shares actually slid after the Q3 report even though the results crushed expectations by a wide margin.
All eyes are now on whether Nvidia can deliver another upside surprise and keep the rally going. Tomorrow's Q4 earnings will be a crucial litmus test for the AI growth narrative that's been driving the market.
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Reference:
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The Street, Morgan Stanley resets Nvidia stock forecast ahead of earnings. Accessed on February 24, 2026
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