Morgan Stanley named a number of shares which might be finest positioned moving into to 2026. The Wall Avenue funding financial institution stated firms corresponding to Nvidia are its prime concepts for subsequent yr. Different overweight-rated names screened by CNBC Professional embody: Western Digital, Spotify and Palo Alto Networks. Spotify Spotify is firing on all cylinders, Morgan Stanley stated. Analyst Benjamin Swinburne stated the audio streamer and podcast platform has a novel mixture of AI utilization and development upside. “We see the AI threat to music labels already discounted and a possibility to reposition AI as a tailwind,” he added. Swinburne believes Spotify has many instruments obtainable to drive margin growth , together with pricing energy. “Whereas we anticipate Spotify to soak up per-subscriber minimal content material value will increase in ’26, doubtless beginning in January with a minimum of [Warner Music Group], we imagine it could actually drive sufficient [average revenue per subscriber] development and profit from different elements to ship on our and consensus gross margin growth expectations,” he wrote. Shares of the corporate are increased by 30% in 2025. Palo Alto Networks Analyst Meta Marshall has the cyber safety supplier as a finest concept for 2026. Morgan Stanley just lately raised its per-share value goal to $245 from $228 and stated the inventory is simply too enticing to disregard at present costs. Marshall likes Palo Alto’s development prospects and is bullish on its acquisition of CyberArk, which has but to shut. “We initially made PANW our High Decide in September as we noticed the corporate finest positioned to profit from platformization and AI tendencies, significantly given valuation, all of which nonetheless stays true,” she wrote. In the meantime, shares of the corporate are increased by 3.6% in 2025. “We proceed to love the setup on the inventory as we progress by CY26, believing there may be nonetheless significant upside to outcomes because the yr turns into extra back-end loaded, acquisitions shut/combine and AI turns into a stronger tailwind,” the analyst stated. Western Digital The exhausting disk drive [HDD] knowledge storage firm can also be firing on all cylinders, in response to the financial institution. Analyst Erik Woodring stated in a current notice that a number of catalysts lie forward for Western Digital, together with the corporate’s Innovation Bazaar, Investor Day and quarterly earnings early subsequent yr. “HDD continues to be one of many healthiest finish markets that we cowl in our tech {hardware} universe — buyer demand has received incrementally higher,” Woodring wrote. The funding financial institution additionally raised its value goal on the inventory to $228 per share from $188, citing the inventory’s sturdy publicity to cloud capex spending. “WDC stays our High Decide and essentially the most compelling mixture of end-market energy, pricing energy and near-term catalysts,” Woodring stated. The inventory has quadrupled in 2025, hovering greater than 302%. Nvidia “Nonetheless the nucleus for the AI commerce, and at an undemanding a number of we thinks it is exhausting to look elsewhere in AI. Nvidia continues to execute at a really excessive degree, rising revenues sequentially by $10bn ($3bn above steerage) in October, and guiding for an additional $8bn in January. With a whole bunch of billions of demand (and climbing) nonetheless but to be served, we anticipate the inventory to go increased as AI sentiment stabilizes.” Spotify “We see AI threat to music labels already discounted and a possibility to reposition AI as a tailwind. … .Whereas we anticipate SPOT to soak up per-subscriber minimal content material value will increase in ’26, doubtless beginning in January with a minimum of WMG, we imagine it could actually drive sufficient ARPU development and profit from different elements to ship on our and consensus gross margin growth expectations.” Palo Alto Networks “We initially made PANW our High Decide in September as we noticed the corporate finest positioned to profit from platformization and AI tendencies, significantly given valuation, all of which nonetheless stays true. … .We proceed to love setup on the inventory as we progress by CY26, believing there may be nonetheless significant upside to outcomes because the yr turns into extra back-end loaded, acquisitions shut/combine, and AI turns into a stronger tailwind.” Western Digital “Getting into subsequent yr, we’ve got an OW-bias to (1) firms with publicity to the energy in Cloud Capex/Public Cloud spending – WDC/STX/ SNX. … .WDC stays our High Decide and essentially the most compelling mixture of end-market energy, pricing energy, and near-term catalysts. … .HDD continues to be one of many healthiest finish markets that we cowl in our tech {hardware} universe — buyer demand has received incrementally higher..”
