Morgan Stanley Reinstates Nvidia as Top Semiconductor Pick

Morgan Stanley reinstated Nvidia as its top pick in the semiconductor sector after a road show with the company's executive leadership. Analysts cited the emergence of agentic artificial intelligence and Nvidia's ability to navigate data center constraints—including land, power, and shell limitations—as primary drivers for the renewed conviction.

The investment bank noted that Nvidia has diversified its customer base to include sovereign entities, neoclouds, and enterprise customers, reducing its reliance on U.S.-based hyperscalers and mitigating infrastructure bottlenecks. Technical projections suggest the upcoming Feynman architecture will increase revenue per gigawatt from $40 billion to over $50 billion by 2028.

Further growth is expected from the Vera Rubin platform, which is projected to provide up to 25 times the token improvement over the Blackwell platform. Additionally, Nvidia expects CPU revenue to double from $20 billion in 2026 to $40 billion in 2027, driven by agentic AI users who may generate ten times the daily tokens of human users.