Nvidia Corporation (NASDAQ: NVDA) shares surged on Tuesday after Morgan Stanley upgraded its rating for Nvidia shares, citing its leadership in the artificial intelligence and gaming markets.
Morgan Stanley analysts raised his rating for Nvidia stock to overweight from equal-weight, citing the company’s dominant positions in artificial intelligence. The analyst estimates Nvidia will post better-than-expected profits in its fiscal 2019, forecasting earnings per share of $6.76.
According to CNBC, analyst Joseph Moore wrote in a note to clients: "In addition to longer-term data investment trends, we see shorter-term drivers in gaming offsetting crypto weakness, and progress in data center inference [machine learning] expanding the long-term opportunity."
Nvidia shares jumped over 5 percent to $226.83 in the early trading on Tuesday. The stock had been under pressure in the last few weeks after Nvidia announced to suspended its self-driving vehicle testing.
The analyst reiterated his $258 price target for Nvidia shares.
"We now believe that developments in hardware and software have positioned NVIDIA to capture a higher portion of Inference, key to the long-term growth rate…Strength in gaming titles, and a new NVIDIA product cycle, should drive growth while minimizing the negative impact of cryptocurrency mining economics moving to zero." Moore wrote, according to CNBC.