Good Entry Point To Buy Into Nvidia Stock, Says Analyst Ahead Of Q2 Results: 'We See Numbers Are Going Up'

Nvidia Corp. NVDA has been a high-flier this year and has been the best-performing S&P 500 stock for the year-to-date period.

The Nvidia Analyst: Morgan Stanley analyst Joseph Moore maintained an Overweight rating and a $500 price target for Nvidia shares. The analyst said the stock remained Morgan Stanley's "Top Pick."

The Nvidia Thesis: The recent sell-off in Nvidia stock is a good entry point, said Moore in a note released Monday. Despite the supply constraints, the analyst expects a meaningful beat-and-raise quarter from the company.

Nvidia is scheduled to report its second-quarter results on Aug. 23, after the market close.

The analyst said he sees a massive shift in spending towards AI and a fairly exceptional supply-demand imbalance that should persist for the next several quarters.

Citing conversations and public data points, Moore said a healthy upside to the June quarter's guidance for $4 billion revenue upside looks likely. The implied $7.5 billion in quarterly data-center revenue is trending to the $15 billion+ mark over the next few quarters, he said. This is the primary driving enthusiasm for the stock, he added.

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Beyond that, the analyst sees durable steady growth, given that overall industry conditions are oversupplied.

Moore said he expects a very positive outlook for the October quarter.

"The selloff the last few days – a combination of macro concerns and a resumption of supply anxieties – materially de-risks the print from the more elevated expectations," the analyst said.

"We see numbers are going up at least enough that this stock will trade at P/Es more similar to the upper end of semis, with material upside still ahead. As a result, we think this is a good entry point into the stock."

Nvidia Price Action: In premarket trading, Nvidia stock rose 0.14% to $ 409.14, according to Benzinga Pro data.

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