Nvidia is set to release first-quarter results after the market close on Wednesday, and Morgan Stanley analyst Joseph Moore has identified several focal points investors should monitor when the company reports.
Moore anticipates that Nvidia will follow its recent pattern of beating consensus and then raising forward guidance. He projects the company will outpace estimates by $3 billion and provide guidance that is $4 billion higher than the market expects. In March, Morgan Stanley promoted Nvidia to its top pick among semiconductor stocks, citing the company as the principal beneficiary of generative AI applications and an attractive entry point.
Reflecting that outlook, Morgan Stanley lifted its revenue and earnings forecasts for multiple reporting periods. For Nvidia’s April quarter, the firm increased revenue expectations from $78.25 billion to $79.26 billion and raised earnings per share from $1.69 to $1.72. For the July quarter, Morgan Stanley raised its revenue estimate from $84.84 billion to $87.88 billion and increased EPS from $1.93 to $2.01.
The firm also pushed out its longer-term projections. Fiscal 2027 revenue was adjusted up from $353.8 billion to $380.59 billion, with fiscal 2027 earnings per share rising from $7.93 to $8.61. Fiscal 2028 assumptions were increased more substantially, with revenue revised from $452.4 billion to $587.45 billion and EPS moved from $10.14 to $13.11.
Moore outlined a path for Nvidia to generate $1 trillion in combined Blackwell and Rubin revenue between calendar years 2025 and 2027. As part of that framing, after accounting for about $30 billion of Hopper-related products in 2025, Morgan Stanley projects $845 billion in datacenter revenue across 2026-2027 before factoring in other products.
That forecast places Morgan Stanley meaningfully above consensus for total datacenter revenue across the same period: the firm cited a consensus figure of $785 billion versus its updated $884 billion projection for 2026-2027.
On valuation, Morgan Stanley raised its price target on Nvidia from $260 to $285. The firm applied a 22 times multiple to its calendar 2027 earnings estimate of $12.99 to arrive at the new target, aligning the stock’s valuation with broader market multiples under the firm’s methodology.
Moore also addressed margin dynamics, noting potential pressure as the company ramps the Rubin architecture and faces higher input costs. His modeling incorporates a decline in gross margins to 72.7% in fiscal 2028, down from current levels.
Regarding supply and inventory, Morgan Stanley pointed to Nvidia’s $95 billion in purchase commitments and $21 billion in inventories as providing coverage for much of the next 18 months.
Finally, Moore expects management to provide updates on recently launched Groq and standalone CPU products, and to offer commentary on the Vera Rubin product cycle, which he says is tracking to schedules for a second-half ramp.
What to watch when Nvidia reports:
- Quarterly revenue and EPS versus the raised Morgan Stanley targets.
- Guidance for upcoming quarters, particularly whether management supports a beat-and-raise outcome.
- Gross margin commentary amid Rubin ramp and input cost pressures.
- Updates on Groq and standalone CPU initiatives and timing for the Vera Rubin ramp.