Morgan Stanley: NVIDIA is transforming into an AI infrastructure "financial partner," new revenue-sharing model could bring $500 billion annual revenue pool, FY28 EBIT expected to increase by 60%
Morgan Stanley analyst Joseph Moore likened NVIDIA's model of providing credit endorsements to emerging AI cloud service providers (neoclouds) in exchange for a share of cloud revenue to "financial innovation in the AI sector." The report pointed out that if the neocloud ecosystem develops to a scale of 25 gigawatts of hashrate, it could generate an estimated annual revenue pool of $500 billion. If NVIDIA were to capture a quarter of the profit share from this, it could potentially lead to an upside of up to 60% in its FY28 earnings before interest and taxes (EBIT). Morgan Stanley maintained an "Overweight" rating on NVIDIA with a price target of $288, listing it as its top pick in the semiconductor industry. NVIDIA recently also announced the establishment of a $50 billion investment fund to support long-term investments tied to revenue.
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