All articles tagged with #morgan stanley
The S&P 500 has fallen about 7.3% in March (on track for its worst month since 2022), but Morgan Stanley says the selloff is nearing its ending stages as the forward P/E has dropped roughly 15% from its peak; Brent crude has jumped about 51% since the start of the U.S.–Iran conflict and is largely priced in, yet higher interest rates remain a near-term risk with rate-cut odds fading by year-end.
The Financial Times reported that Pete Hegseth’s Morgan Stanley broker approached BlackRock in February about a multimillion-dollar investment in the iShares Defense Industrials Active ETF, which holds major defense names like RTX, Lockheed Martin and Northrop Grumman; the investment did not proceed because the ETF wasn’t yet available to Morgan Stanley clients. Pentagon spokesperson Sean Parnell rejected the report as “entirely false and fabricated,” saying neither Hegseth nor his representatives pursued such an investment. The piece appears in the context of the ongoing Iran conflict and related regional tensions.
According to FT, a Morgan Stanley broker for US Defense Secretary Pete Hegseth explored a multimillion-dollar investment in BlackRock's Defense Industrials Active ETF before the Iran strike, but the deal did not proceed because the fund wasn’t yet available on the platform; while no wrongdoing is alleged, the timing could invite scrutiny given the defense sector’s link to government policy.
Gold fell into bear-market territory, dropping as much as 23% from its peak, while Morgan Stanley’s Mike Wilson argues the S&P 500–to–gold ratio has surged (about 12%) as bullion weakens. He says this divergence suggests equities may be pricing in less geopolitical risk and could be a positive longer‑term signal for stocks, even as gold remains under pressure amid geopolitics and possible government gold sales; markets added to gains after Trump signaled talks with Iran.
Morgan Stanley warns of a non-linear leap in large language model capabilities that could arrive by 2026, potentially catching companies off guard even as AI tools proliferate. The bank cites rapid progress, OpenAI GPT-5.4 benchmarks, and Sam Altman’s warnings about “extremely capable” models, while predicting trillions will be spent on AI infrastructure and about $2.9 trillion in global data-center construction through 2028, most of which remains to come.
Morgan Stanley remains cautious on Rivian (RIVN) ahead of the March 12 launch of the R2, maintaining an Underweight rating with a $12 target and citing ramp-up profitability risks, while the broader Street shows a Hold with an average target around $17.32, suggesting modest upside despite near-term hurdles.
Morgan Stanley’s Michael Wilson argues the S&P 500 is nearing the end of its rolling correction, with earnings growth set to reaccelerate and market breadth improving. However, the pace of oil and dollar moves could keep volatility elevated in the near term and influence how quickly the market flexes out of the correction, potentially creating opportunities in cyclical names.
Oil-driven price spikes from the Iran conflict are shifting stock–bond correlations and undermining the traditional 60/40 portfolio, with Morgan Stanley noting episodes where both equities and bonds fall as oil surges. While short-duration Treasuries still tend to move negatively with stocks, long-duration bonds’ diversification power has weakened, contributing to a bear-flattening yield curve. With inflation fears and policy uncertainty pulling in opposite directions, there may be no simple fix for diversification, prompting investors to rethink bond duration and hedging strategies in the medium term.
Morgan Stanley argues that fear over AI is creating a rare buying window for high-quality software, services, and financial stocks by focusing on 'AI adopters'—companies that use AI to boost efficiency and pricing power. They highlight names like Microsoft, Intuit, Atlassian, and Palo Alto Networks as beaten-down but solid bets, with banks and payments firms such as Citi, Visa, and Mastercard also set to benefit; the idea is that AI-enabled operating leverage could lift earnings through 2026.
Morgan Stanley’s Keith Weiss says Microsoft’s latest results remain strong despite a 10% one‑day drop after the F2Q report. Revenue was $81.3 billion (+16.8% YoY) with EPS $4.14, while Azure grew 38% in constant currency and M365 Cloud rose 17%. A jump in data-center spend to $37.5 billion and slower cloud momentum are noted, but commercial bookings surged, and OpenAI-related deals boosted the RPO to about $625 billion. Weiss views the pullback as an attractive entry point and assigns an Overweight rating with a $650 target, implying ~51% upside over the next year; the broader Street consensus remains Strong Buy with a higher target around $603.47.
Morgan Stanley analyst Keith Weiss argues Microsoft could act as a positive earnings catalyst ahead of its December-quarter report, highlighting Azure growth, GenAI investments, and a broad platform that could support mid-teens revenue growth and durable high-teens total returns for FY26. Weiss assigns an Overweight rating with a $650 target, and the Street broadly backs MSFT with a Strong Buy consensus as the stock trades around 23x CY27 GAAP EPS.
Morgan Stanley identifies four 2026 market themes—a multipolar world with more protectionism, broader AI adoption, a rebound in energy demand, and ongoing societal shifts—and names 14 US stocks it views as overweight plays across tech, energy, healthcare, industrials, and consumer staples (including Amazon, Nvidia, Microsoft, Broadcom, Cisco, NextEra Energy, Bloom Energy, EQT, Eli Lilly, UnitedHealth, Phoenix Education Partners, Rockwell Automation, RTX, and Walmart) with upside to price targets.
Morgan Stanley’s Joseph Moore cautions that despite near-term strength from CPU shortages and AI-driven demand, Intel’s long-term earnings power looks doubtful, with AMD likely to capture much of the growth and ongoing margin pressure. He reiterates a cautious stance (Equal-Weight) with a $38 target, while the street’s average target remains higher but still implies a decline over the next year, contributing to a mixed outlook ahead of Intel’s 4Q25 results.
Morgan Stanley beat Q4 2025 estimates with $2.68 EPS on $17.89B revenue as wealth management revenue rose to $8.4B; full-year wealth revenue hit a record $31.8B and client assets reached $9.3T. Investment banking revenue climbed 47% to $2.41B. The firm repurchased $1.5B of stock in the quarter and $4.6B for the year, and shares rose over 3% after the results.
Morgan Stanley doubles up its upgrade on a cybersecurity stock as it nears a pivotal inflection point, signaling potential upside for investors.