Morgan Stanley analyst Joseph Moore recently commented on Nvidia, stating that despite the company's stock being volatile due to tariff policies and export controls, the market’s concerns over Nvidia's sales outlook are 'ridiculous.' He emphasized that the demand for AI inference chips is experiencing explosive growth.

The U.S. placed export restrictions on Nvidia's H20 chips, impacting the Chinese market, leading to a significant loss of $188 billion in market value for the company. However, Moore highlighted in his report that fears among investors about companies cutting AI hardware budgets due to rising inventories are unfounded, as strong demand for inference computing can outweigh these concerns.

Moore pointed out that demand for inference chips has already vastly exceeded supply by billions of dollars, with capacity constraints being the only limitation. He anticipates that this demand surge will be sustained and has raised Nvidia's fiscal year 2026 revenue forecast by 10.7% and profit forecast by 11.9%. He believes these new forecasts may still be conservative.