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Nvidia shares surge 10% after strong AMD results, bullish Morgan Stanley forecast
Nvidia (NVDA) shares rose more than 10% on Wednesday following better-than-expected guidance from AMD (OMG) and an upbeat forecast from Morgan Stanley analysts after a more than 20% drop in shares.
AMD’s quarterly results come out on tuesday night eased some concerns that the AI business may have run its course as investors fled Big Tech last month, as the company beat expectations on revenue and profit and posted a better-than-expected outlook for the third quarter.
“The fear that some of this momentum won’t last, or perhaps the fear that the revenue trajectory won’t hold over the next 12 months or so — I think that’s starting to subside,” CFRA senior equity analyst Angelo Zino told Yahoo Finance on Wednesday.
AMD shares rose as much as 6% in early trading.
Chip pairs including Broadcom (AVGO), Micron (MU), Taiwan Semiconductor (TSM), ASML (ASML) and Super Micro (SMCI) were also recovering on Wednesday.
Source: Yahoo Finance
Nvidia shares were also boosted Wednesday by a note from Morgan Stanley analysts led by Joseph Moore, who moved the stock to a “Top Pick” after a recent slide from all-time highs reached in June.
The firm wrote that the roughly 25% selloff in Nvidia shares “represents a good entry point as we continue to hear strong near- and long-term data, with competitive concerns overstated.”
Morgan Stanley cited five main drivers of Nvidia’s recent decline — spending plans, competition, export controls, supply chain fears and valuation concerns — but said: “Through these concerns, the earnings environment is likely to remain strong, for Nvidia and the entire AI complex.”
The firm maintained its Overweight rating and $144 as its price target on the stock.
Nvidia shares are still up more than 130% this year, outpacing the Nasdaq’s more modest 17% gain. The company is scheduled to release its next quarterly report on Wednesday, Aug. 28.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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