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Nvidia is the way to go to capitalize on the artificial intelligence boom, according to Morgan Stanley. Analyst Joseph Moore switched his top pick to Nvidia from Advanced Micro Devices, and hiked his price target, saying the former has more immediate upside than other AI stock plays. “Making NVDA our top pick, reflecting significant potential for near term upside – as the only company likely beating and raising due to AI in CY23,” Moore wrote Friday. “AMD has been our top pick, and we continue to be bullish on their 2024 AI opportunity; but the top pick designation is meant to highlight near term upside, which is a bigger factor for NVIDIA. As a result, we remain OW both stocks, but are shifting to NVDA for our top pick,” he added. NVDA YTD mountain Nvidia shares YTD Nvidia shares are already higher by 191% this year, recently topping a $1 trillion market valuation. However, the analyst expects even more upside. His $500 price target, raised from $450, means the stock should climb another 17%. Nvidia popped 1.6% in the Friday premarket. The analyst said Nvidia remains the top AI pick for 2023, even as investors cast about for more clear beneficiaries for the trend. “One of the most common questions we continue to get from investors is “What else is there to buy for the AI theme outside of NVIDIA?'” Moore wrote. “[We] see new AI business largely cannibalizing non-AI/legacy compute business in the semiconductor industry, making the net impact of AI unclear in all places but one.” “There is one ‘2023 leader,’ from the standpoint of numbers going up, though we do expect that to broaden in 2024,” he added. —CNBC’s Michael Bloom contributed to this report.
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