Morgan Stanley Picks Nvidia as Top AI Stock, Cautions of Potential Market Headwinds from AI-Driven Rally

Investment bank Morgan Stanley has said it is recommending technology firm Nvidia as its new top choice in a note to investors. It highlights Santa Clara-based Nvidia’s potential for growth in the artificial intelligence (AI) sector. Advanced Micro Devices had previously been Morgan Stanley’s leading pick, but analyst Joseph Moore sees a greater opportunity for near-term success with Nvidia. Moore cited Nvidia’s ability to consistently “beat and raise” its earnings per share, the attraction of major clients, and a growing investor interest in AI as reasons for the upgrade. The rising interest in AI for other companies could potentially affect non-AI legacy computer businesses within the semiconductor sector. Morgan Stanley warned that the impact of AI growth on the industry remained unclear, with the exception of Nvidia, which it expects to be its “2023 leader from the standpoint of numbers going up”.