03:54 PM EDT, 10/10/2024 (MT Newswires) -- Nvidia's ( NVDA ) management is confident of an upcoming long-term artificial intelligence investment cycle, Morgan Stanley said Thursday after hosting the company's Chief Executive Jensen Huang on a three-day non-deal road show.

The company's strong long-term outlook is due to the growing complexity of AI inference, which remains a major opportunity as future models will require significantly more computing power, according to the firm.

Morgan Stanley said that Nvidia's ( NVDA ) Blackwell processor and rack systems are central to its AI strategy as it positions Nvidia ( NVDA ) to meet the growing demands of AI workloads, where competitors may struggle.

"Blackwell brings a much more capable processor to the AI markets, but the most important innovation could come from the GB200 systems incorporating a 'full rack' approach," the firm added.

The near-term business outlook looks positive as the company moves past initial yield issues with Blackwell and ramps up production in a strong demand environment, Morgan Stanley said.

Morgan Stanley reiterated its overweight rating for Nvidia's ( NVDA ) stock and kept the price target at $150.

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