When Morgan Stanley talks, Wall Street listens. And right now, the investment bank is saying that Nvidia Corporation (NVDA) and Broadcom Inc. (AVGO) still have plenty of room to run as artificial intelligence transforms the chip industry.

The Numbers Behind the Optimism

Morgan Stanley analyst Joseph Moore just reiterated his overweight rating on Nvidia, but sweetened the deal with a new price target of $250, up from $235. That might not sound dramatic until you realize it represents a 41% increase from where the chipmaker closed on Friday, according to CNBC.

Moore's reasoning? Nvidia continues to dominate its market, and worries about competitive threats are "becoming overstated." That said, he acknowledged there's still uncertainty about what might actually shift investor sentiment one way or another. In other words, Nvidia is winning, but the market is still trying to figure out what could change that.

Broadcom also got some love from Moore, who maintained his overweight rating while bumping the price target to $443 from $409. That's a 10% premium over Broadcom's Friday closing price. Moore called out the company's substantial AI exposure as a major positive, with special attention to Broadcom's tensor processing unit (TPU) business as a key growth driver.

But there's a catch. Moore warned that rising TPU demand might actually cannibalize expectations for other Broadcom chips, particularly those tied to Meta Platforms Inc. (META) AI infrastructure builds. So it's not all upside, just mostly upside.

The Street's AI Believers

Morgan Stanley isn't alone in its enthusiasm. The AI revolution has become the dominant narrative in tech, and analysts are lining up to bet on its staying power.

Wedbush Securities Managing Director Dan Ives recently summed up Nvidia's position with characteristic flair: "it's Nvidia's world, everyone else is paying rent." That's about as bullish as it gets.

Meanwhile, CNBC's Jim Cramer suggested that Broadcom stands to be the main winner if Alphabet Inc. (GOOG) (GOOGL) and Meta strike some kind of deal. Morgan Stanley's fresh price target hikes only reinforce this optimistic view, reflecting confidence that AI growth will keep fueling these semiconductor giants.

Performance That Backs the Hype

The enthusiasm isn't just theoretical. Year-to-date, Nvidia stock has climbed 27.96%, while Broadcom has absolutely crushed it with a 73.70% surge. Those are the kind of returns that make analysts willing to stick their necks out with aggressive price targets.

Nvidia ranks in the 93rd percentile for quality and the 98th percentile for growth, reflecting its exceptional performance across both dimensions. The company's ability to maintain market dominance while continuing to expand has impressed even skeptical observers.

For investors trying to navigate the AI boom, these price target increases signal that major institutions still see runway ahead. Whether Moore's targets prove accurate or conservative remains to be seen, but the directional bet is clear: AI chips aren't slowing down anytime soon.