NVIDIA Gets Overweight Rating for Strong AI Capex Forecast

NVIDIA Corporation (NVDA) has been given an Overweight rating by Morgan Stanley, citing strong AI capex into 2026. The chipmaker specializes in AI-driven solutions for data centers, self-driving cars, robotics, and cloud services. While NVDA has potential, some AI stocks offer greater upside and less downside risk.

NVIDIA Corporation (NVDA) has received an Overweight rating from Morgan Stanley, citing strong artificial intelligence (AI) capital expenditure (capex) into 2026. The chipmaker specializes in AI-driven solutions for data centers, self-driving cars, robotics, and cloud services. This rating reflects the growing demand for AI infrastructure and the company's dominant market position in the data center GPU market.

NVIDIA's AI growth is driven by the increasing adoption of AI platforms by businesses across multiple sectors. Palantir Technologies, for instance, reported a 93% year-over-year growth in its US commercial business, driven by demand for its AI platform. This growth signals strong AI adoption and benefits NVIDIA's stock [1].

Major tech companies, including Alphabet, Meta, and Amazon, have increased their AI infrastructure spending budgets for 2025. Alphabet raised its capital expenditure forecast from $75 billion to $85 billion, while Meta boosted its AI spending guidance from $64 billion to $66 billion. Amazon allocated $55.7 billion to capital expenditures in the first two quarters alone, with the potential for full-year AI spending exceeding $118 billion [1].

NVIDIA's new Blackwell Ultra GPUs offer up to 50 times better performance than the previous H100 chips and began shipping in Q2 2025. The company's fiscal Q2 2026 results should provide the first sales update for these new AI chips [1].

Wall Street expects NVIDIA to report earnings of around $1 per share for Q2 fiscal 2026, representing a 47% increase from the prior year period. Analysts will closely monitor management's guidance for Q3 fiscal 2026, with revenue projections of $52 billion or higher potentially driving additional NVIDIA stock gains [1].

While NVIDIA has potential, some AI stocks may offer greater upside and less downside risk. Meta Platforms, Inc. (NASDAQ:META), for example, has been identified as a significant non-hardware beneficiary of AI, with Loop Capital raising its price target on the stock to $980.00 [2].

Tesla, Inc. (TSLA) also leverages AI extensively, with a focus on autonomous driving, robotics, and energy management. The company's AI strategy report highlights ten distinct use cases of AI agents, demonstrating the integration of AI across various domains [3].

In conclusion, NVIDIA's strong AI growth and dominant market position in data center GPUs position the company for continued success. However, investors should consider the broader AI landscape and the potential of other AI stocks.

References:
[1] https://moneycheck.com/nvidia-stock-nvda-palantir-ai-growth-and-august-earnings-signal-potential-rally/
[2] https://finance.yahoo.com/news/meta-called-biggest-non-hardware-064911087.html
[3] https://www.klover.ai/tesla-uses-ai-agents-10-ways-to-use-ai-in-depth-analysis-2025/