[Morgan Stanley Analyzes NVIDIA's New Cloud Revenue Sharing Model, Optimistic About $10 Billion in Recurring Revenue]
According to TrendForce Research, Morgan Stanley's August 14 report highlighted that NVIDIA has introduced a new cloud architecture, offering credit guarantees to new cloud service providers in exchange for future cloud revenue sharing. Morgan Stanley maintains an Overweight rating for NVIDIA with a target price of $288, believing this model could generate recurring revenue in the range of $10 billion.
Morgan Stanley estimates that if the new cloud ecosystem reaches a scale of 25GW, with annual revenue of $20 million per MW, and NVIDIA secures one-quarter of the revenue share, FY28 EBIT could increase by approximately 60%. NVIDIA's announced $500 billion investment fund has already limited its direct exposure to below 25%.
