Proactive Investors - NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) shares jumped more than 12% after analysts at Morgan Stanley (NYSE:NYSE:MS) elevated the stock to “top pick” status following its recent sell-off.
They believe the 7% drop in Nvidia on Tuesday “presents a good entry point as we continue to hear strong data points short term and long term, with overblown competitive concerns.”
“Nvidia stock has sold off on a large list of concerns that we think are likely to fade with time,” they wrote in a note to clients.
Analysts believe capital spending fears “seem premature,” noting that customer spending on AI infrastructure has been non-linear due to space and power constraints but demand for Nvidia’s GPUs remains strong.
“Several companies have appealing AI opportunities but Nvidia remains at the center and we do not see that changing,” they wrote.
Further boosting the stock were better-than-expected second quarter results from rival AMD (NASDAQ:AMD) and comments from Microsoft (NASDAQ:MSFT) about its plans to increase capital spending on AI infrastructure in the new fiscal year.
Shares of Nvidia traded hands up 12.1% at about $116 at noon on Wednesday.