11:01 AM EDT, 08/18/2025 (MT Newswires) -- Nvidia ( NVDA ) is poised for a strong fiscal year beginning in late January, driven by increasing demand from a broadening customer base, Morgan Stanley said Monday in a report.

"The 12-month picture across demand, supply, and competitive outlook all continue to be very favorable," Morgan Stanley said, raising its fiscal year 2027 earnings-per-share forecast by 4%.

Demand from hyperscalers, which run massive cloud computing services, remains robust, while a second tier of customers is emerging as "as an underappreciated source of strength," the report said.

On the supply side, Nvidia ( NVDA ) is making progress in assembling server racks and expanding final-stage testing capacity across its Blackwell chip supply chain, Morgan Stanley said.

Morgan Stanley raised its price target on Nvidia ( NVDA ) stock to $206 from $200 and maintained its overweight rating.

Nvidia ( NVDA ) is expected to report fiscal Q2 earnings on Aug. 27.

"Expectations have risen ahead of Nvidia's ( NVDA ) earnings, and we think rightfully so," Morgan Stanley said. "We expect a strong quarter and outlook, but we're a little measured on the current quarter -- our optimism centers on what lies ahead."

Nvidia ( NVDA ) shares rose 1% in recent Monday trading.

Price: 182.18, Change: +1.73, Percent Change: +0.96