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The analyst says Nvidia is a “master holding company.” But he faces headwinds for short-term play.

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A sign has been placed in front of Nvidia’s headquarters.

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Do not sell your shares

nvidia

So far, Morgan Stanley has recommended. Analyst Joseph Moore wrote on Tuesday that the stock remains “essential property”, although concerns over a slowdown in the gaming sector remain a near-term risk.

Moore took over the cover from Nvidia (stock ticker:

NVDA

), pricing the stock at equal weight and setting a price target of $217.

“Stock is an essential good; our approach is to at least keep the market weight in the title and look for points to gain leverage,” he wrote on Tuesday.

Nvidia stock fell 0.06% to $195.22 on Tuesday.

While Moore is optimistic about the company’s long-term prospects and market position, he models a significant downturn in gaming that could lead to the 2023 challenge. The analyst expects a 20-year straight drop. % of games in the April 2023 quarter, but believes the growth could support the launch of new ray tracing products.

Moore wrote that this slowdown could be offset by strong growth in other Nvidia business areas, including the data center segment, the professional visualization segment and the automotive segment.

Moore added that Nvidia’s data center, in particular, is seeing strong year-over-year growth as the company expands its offering and customers shift to cloud-based storage solutions. The game was a little restricted due to the lack of chips, but that could improve as the blockages are eased, he wrote.

Nvidia shares have been battered in recent weeks, losing nearly 34% year-to-date on concerns over weak consumer demand for PCs and gaming cards. semiconductors was also affected by higher interest rates which put a damper on growth stock investors.

But nonetheless, Nvidia had the highest revenue among its peers, Moore said, which was “too rich for the configuration” he sees in the stock, earning him a equal weight rating.

“The bearish setup in consumer end markets keeps us on the sidelines until the near-term trade outlook improves. However, further correction in the stock price will allow us to turn more positive.

Moore is one of seven analysts covering FactSet stocks that have rated Nvidia for a decade. Of the 45 analysts covering the stock, 37 or 82% rated it long or overweight, while one or 2% rated it short.

In mid-April, Byrd analyst Tristan Gera downgraded to Neutral from Outperform and lowered the target price to $225 from $360, saying that while he believes in long-term fundamentals company, recent order cancellations in the consumer GPU segment could signal trouble ahead.

Write to Sabrina Escobar at [email protected]