Morgan Stanley upgraded NVIDIA's target price on Tuesday and advised investors that now is the right time to "add positions" in the chip manufacturer. These comments inject fresh market optimism ahead of NVIDIA's second-quarter fiscal 2026 earnings report scheduled for August 27th.

Morgan Stanley analyst Joseph Moore maintained a "buy" rating on NVIDIA stock and slightly adjusted the target price to $206, citing continued strong customer demand and improved Blackwell GPU supply.

He also raised his revenue and earnings per share forecasts for NVIDIA in 2026, reflecting accelerated rack assembly progress and expectations for increased shipments from the second half of this year through early 2026.

Moore predicts NVIDIA will maintain approximately 85% market share in AI data center chips in 2026, leaving competitors facing a challenging catch-up task.

He expects NVIDIA's July and October revenues to exceed previous estimates and correspondingly raised his 2026 revenue/EPS outlook.

Despite potential impacts from overseas licensing approvals and supply variables on short-term performance, the institution's updated forecasts highlight the backdrop of sustained demand from hyperscale cloud customers and growing willingness to cooperate among small and medium-sized cloud buyers. This combination helps explain why Wall Street is showing bullish sentiment ahead of this quarter's earnings report.