Nvidia Earnings Ahead: Morgan Stanley Adjusts Price Target—What Investors Should Expect

On August 18, 2026, Morgan Stanley published its forecast for Nvidia's quarterly earnings due after US market close on August 26, and raised its price target to $288. For the second quarter of fiscal year 2027 (ending July 2026), the US investment bank expects revenue of $91.1 billion and earnings per share of $2.07. The rating remains Overweight, with Nvidia staying as a top pick among semiconductor stocks.

Consensus estimates from other analysts are around $91.96 billion in revenue and adjusted earnings per share of $2.09. Historically, Nvidia has beaten expectations—on average, the earnings per share beat has been 5.65 percent, and the revenue beat 3.04 percent.

Four Quarters of Post-Earnings Losses

Morgan Stanley points to a concerning pattern in its analysis: Nvidia stock fell on the day after quarterly earnings release in four consecutive quarters—even though the company beat expectations and raised guidance each time. The analysts interpret this as evidence that merely beating market expectations is no longer sufficient to drive further price gains.

According to Morgan Stanley, investor attention is shifting from the question "Can results beat estimates?" to longer-term structural challenges. The bank identifies three critical risk areas that investors are focusing on:

• Gross margin pressure: Rising costs for DRAM, wafers, advanced packaging, and substrates could keep gross margins in the mid-70 percent range or put them under pressure.
• Circular financing risks: Concerns regarding financing structures in AI infrastructure.
• Market share defense: Increasing competition from application-specific integrated circuits (ASICs) and AMD.

Blackwell Demand and Supply Chain Improvement

Morgan Stanley points to robust demand for Blackwell chips. A term from the semiconductor industry: Blackwell refers to Nvidia's current generation of AI accelerators for data centers, which are based on 4-nanometer manufacturing technology. According to checks of the Asian supply chain, 4-nanometer wafer starts for Blackwell are increasing, suggesting that current shipment assumptions may be conservative.

According to the analysts' assessment, upside potential is concentrated in the quarter ending January (Q4 FY2027). Supply chain improvements support production ramp guidance.

Rubin Platform as Growth Catalyst

Morgan Stanley sees the next generation Rubin platform as the primary catalyst for future stock price gains following quarterly earnings. Rubin refers to Nvidia's upcoming AI chip architecture, which is set to launch after Blackwell. For the third quarter, the bank estimates the following key figures:

• Planned shipment volumes: approximately 150,000 units
• Estimated revenue contribution: approximately $9 billion
• Average value per unit: approximately $60,000

Morgan Stanley expects that Nvidia will emphasize in the earnings call that Rubin can significantly improve the economics of AI factories compared to Blackwell. Channel checks show strong market acceptance for Rubin, though the market still needs time to evaluate the market share shift versus competitors.

Forecast for the Coming Quarter

For the third quarter of fiscal year 2027 (ending October 2026), Morgan Stanley forecasts revenue of $102.3 billion and earnings per share of $2.34. This would represent significant revenue growth compared to the quarter reported on August 26.

The expectation is thus clear: Nvidia must not only beat current estimates, but also provide compelling arguments for its long-term market position—particularly regarding margin development, production ramp of new platforms, and competitiveness against alternative chip architectures.