Shares of Nvidia (NVDA 4.40%) are surging higher on Friday. The AI chip giant’s stock had gained 4% as of 1:50 p.m. ET and was up as much as 5.2% earlier in the day. This comes as the S&P 500 was up 0.4% and Nasdaq Composite was up 1%.
Shares of the chipmaker were lifted after Morgan Stanley raised its revenue projections for the company as well as the revelation of some positive news in the ongoing trade war with China.
Morgan Stanley is bullish
This legendary investment bank updated its 2027 projections for Nvidia. Analyst Joseph Moore is now forecasting total revenue for 2027 of $255.5 billion. That’s up from his previous projection of $230.9 billion. He also raised his earnings per share (EPS) projections to $6.01 from $5.37.
Even in the face of macroeconomic uncertainty, Moore cited growing demand for inference chips and AI demand. Inference, as opposed to training, refers to the computing that happens after an AI is trained. As AI tools grow in usage, demand for inference chips grows.
China reportedly lowers tariffs
As the trade war with China continues, some positive news emerged today. Although the country very publicly is refusing to negotiate with President Donald Trump unless he lowers U.S. tariffs, the country appears to have reduced its tariffs on semiconductors made in the U.S., according to a report from CNN business.
Although Nvidia was already largely exempted because it mainly manufactures its chips in Taiwan, the news is still positive for the company because in contrast to its public messaging, it indicates China is ready to play ball, so to speak. The lowering of trade tensions between the U.S. and China can only help Nvidia’s business.
Even if a deal can’t be reached between the two superpowers, I remain bullish on Nvidia.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
