Nvidia, Broadcom to benefit in 2026 as AI strength set to ramp 'materially,' MS says
Dec. 01, 2025 10:32 AM ET
By: Chris Ciaccia, SA News Edito
Morgan Stanley analysts raised their price targets on Nvidia ( NVDA) and Broadcom ( AVGO) on Monday, noting that artificial intelligence-related strength is likely to ramp “materially” next year.
“We continue to see NVIDIA maintaining dominant market share, as threats are becoming overstated, though we aren't sure exactly what will turn sentiment around,” analysts, led by Joseph Moore, wrote in a note to clients. “We model for AVGO and AMD ( AMD) to grow their AI processor revenues slightly faster than NVDA in CY26, but that mostly just reflects supply chain limitations of a $205B run rate revenue stream — all key products are supply constrained through 2026.”
The analysts raised their price targets on Nvidia to $250 from $235 and to $443 from $409 on Broadcom.
Delving deeper, the analysts said that their belief, informed by contacts, that Nvidia will have the best economics for most applications is “unwavering.”
“Customers' biggest anxiety for the next 12 months is their ability to procure enough NVIDIA product generally, and Vera Rubin specifically,” the analysts explained. “Of course, everyone wants an alternative, and those alternatives will have good economics for some applications. TPU is by all accounts a solid alternative, and one that has meaningfully contributed to several key models. But it's worth keeping in mind that NVIDIA just did a $51B data center quarter, roughly 14x TPU revenues, and put up $10B of sequential revenue growth (itself about 3x TPU revenue).” |
