Nvidia still the top pick for Morgan Stanley, saying DeepSeek changes nothing for its customers

The post-DeepSeek world looks a lot like the pre-DeepSeek world, according to Morgan Stanley.

As such, analysts led by Joseph Moore doubled down on Nvidia as their top pick in the semi space, echoing a call by Bank of America earlier this week.

“Talking to our cloud contacts, we are hearing that none of this changes the plans of any of the major participants, and as we write below, there was material validation of that,” Morgan Stanley’s team wrote.

This “material validation” comes in the form of eye-popping capex plans from Meta, which expects to invest $65 billion this year, and Alphabet, which is dropping $75 billion on the cause.

“Capex commentary from Nvidia’s largest customers reaffirmed investment trajectories, and emphasized a continued near term supply demand mismatch,” the analysts added. “Many of the architects of the largest AGI clusters have reiterated a commitment to scaling out large training clusters with no indication that DeepSeek changes that momentum.”

Some potential negatives for the stock going forward could include additional export controls, a more difficult environment for hyperscalers in justifying AI spend, and negative investor sentiment. (On that last point we wonder, “Which investors?” as retail is diving headfirst into the megacap tech stock dips.)

Morgan Stanley has a price target of $152 for the stock, which is up about 7% since its record one-day loss of market cap.