12:31 PM EDT, 05/23/2024 (MT Newswires) -- Nvidia ( NVDA ) is showing "no sign of slowing down" after its Q1 beat with revenue of $26.04 billion compared to Wall Street expectations of $24.59 billion, Morgan Stanley said Thursday in a note.

The firm said Nvidia ( NVDA ) has an upside of $2 billion that is before new product hits the markets in H2.

"The $2 billion of upside is coming from product that will be winding down over the next nine months, with a transition to Blackwell which will take us right back into allocation," Morgan Stanley said.

The company continues to be the "clearest way" to get exposure to artificial intelligence "even amid extreme enthusiasm," the firm said. "With the rally in other compute names with AI exposure, Nvidia ( NVDA ) actually becomes easier to rationalize."

The firm also said the customer demand and front line sales are more optimistic than what "supply chain or lead time would indicate."

Morgan Stanley lifted Nvidia's ( NVDA ) price target to $1,160 from $1,000 and maintained overweight rating.

Nvidia ( NVDA ) shares advanced past 10% in recent trading.

Price: 1047.34, Change: +97.84, Percent Change: +10.30