Analysts at Morgan Stanley have raised their price targets for NVIDIA (NVDA.US) and Broadcom (AVGO.US), citing expectations that artificial intelligence-related momentum will "substantially" accelerate next year. The firm increased NVIDIA's target price from $235 to $250 and Broadcom's from $409 to $443.

In a client note, a team led by analyst Joseph Moore stated, "We maintain our view that NVIDIA will retain dominant market share, as concerns over competitive threats appear overstated—though we remain uncertain about what could shift market sentiment."

The analysts projected that Broadcom and AMD (AMD.US) would see slightly faster AI processor revenue growth than NVIDIA in fiscal 2026. However, they attributed this primarily to supply chain constraints, with total revenue potential capped at $205 billion, as all key products face supply limitations until 2026.

After thorough analysis, the team emphasized their "unshaken" confidence in NVIDIA's superior cost efficiency for most applications, based on industry feedback. "Customers' primary concern over the next 12 months is securing sufficient NVIDIA supply, particularly the latest Vera Rubin chips," they explained.

"While alternatives like Google's Tensor Processing Units (TPUs) demonstrate solid performance and contribute significantly to certain model development, NVIDIA's data center revenue—$51 billion last quarter—remains 14x larger than TPU revenue. Notably, NVIDIA achieved $10 billion sequential revenue growth, which alone triples TPU's total revenue," the analysts added.