11:35 AM EDT, 05/27/2025 (MT Newswires) -- Nvidia's ( NVDA ) near-term issues are well known, but the path to a reacceleration in H2 is clear, Morgan Stanley said in a Tuesday note, adding that the stock remains a top pick.

"Near term issues are well telegraphed, and the path to a 2h re-

acceleration is clear," the report said.

The ban on the exports of Nvidia's ( NVDA ) H2O is a 10% growth headwind sequentially in July that has not been factored in the consensus numbers, so there is some downside potential versus the stale consensus, the report said.

The company's GB200 racks have had supply challenges, but the note said that these have turned a corner and that the numbers will trend up "meaningfully" moving forward. Further, the report said investors are underestimating the demand from non-rack form factors and HGX as a mitigation to the rack issues.

The data center business will drive much of the growth over the next five years, as enthusiasm for generative AI has created a strong environment for hardware solutions, the report said.

Morgan Stanley kept its overweight rating and $160 price target.

Price: 135.01, Change: +3.72, Percent Change: +2.83