Morgan Stanley: Nvidia remains our first choice, selloff a buying opportunity

Shares of chipmaker Nvidia rose on Thursday after Morgan Stanley said in a note that it sees the recent selloff, sparked by concerns about competition from DeepSeek, as a buying opportunity and reiterated its position that Nvidia remains its “first choice.”

The analysts stressed that despite the deterioration in sentiment due to long-term uncertainty, “the near-term business continues to hold steady,” with strong demand for AI chips. Morgan Stanley noted that investors’ concerns center around three main risks: the possibility of further restrictions on U.S. exports, a shift in the funding environment for AI investments, and increasingly negative sentiment.

The bank’s analysts acknowledged that “more restrictions are likely to come” but said the U.S. cannot realistically control the development of global AI software. The report also dismissed speculation about Nvidia’s shipments to Singapore, saying: “We are very confident that Nvidia, and all of our coverage, has complied with the rules.” Despite these risks, Morgan Stanley maintains a bullish outlook, citing several reasons for optimism. These include stable demand for Hopper chips, improved visibility on Blackwell’s supply, and strong signs that Nvidia’s data center customers remain committed to large-scale AI investments.