Morgan Stanley named a number of shares which can be greatest positioned entering into to 2026. The Wall Avenue funding financial institution mentioned firms akin to Nvidia are its prime concepts for subsequent 12 months. Different overweight-rated names screened by CNBC Professional embrace: Western Digital, Spotify and Palo Alto Networks. Spotify Spotify is firing on all cylinders, Morgan Stanley mentioned. Analyst Benjamin Swinburne mentioned the audio streamer and podcast platform has a singular mixture of AI utilization and development upside. “We see the AI threat to music labels already discounted and a chance to reposition AI as a tailwind,” he added. Swinburne believes Spotify has many instruments accessible to drive margin growth , together with pricing energy. “Whereas we anticipate Spotify to soak up per-subscriber minimal content material price will increase in ’26, possible beginning in January with not less than [Warner Music Group], we imagine it may well 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 larger by 30% in 2025. Palo Alto Networks Analyst Meta Marshall has the cyber safety supplier as a greatest thought for 2026. Morgan Stanley lately raised its per-share value goal to $245 from $228 and mentioned the inventory is just 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 Prime Choose in September as we noticed the corporate greatest positioned to learn from platformization and AI traits, significantly given valuation, all of which nonetheless stays true,” she wrote. In the meantime, shares of the corporate are larger by 3.6% in 2025. “We proceed to love the setup on the inventory as we progress by means of CY26, believing there may be nonetheless significant upside to outcomes because the 12 months turns into extra back-end loaded, acquisitions shut/combine and AI turns into a stronger tailwind,” the analyst mentioned. Western Digital The exhausting disk drive [HDD] knowledge storage firm can also be firing on all cylinders, in accordance with the financial institution. Analyst Erik Woodring mentioned in a latest observe that a number of catalysts lie forward for Western Digital, together with the corporate’s Innovation Bazaar, Investor Day and quarterly earnings early subsequent 12 months. “HDD continues to be one of many healthiest finish markets that we cowl in our tech {hardware} universe — buyer demand has acquired 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 Prime Choose and essentially the most compelling mixture of end-market energy, pricing energy and near-term catalysts,” Woodring mentioned. 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 stage, rising revenues sequentially by $10bn ($3bn above steerage) in October, and guiding for one more $8bn in January. With a whole bunch of billions of demand (and climbing) nonetheless but to be served, we anticipate the inventory to go larger as AI sentiment stabilizes.” Spotify “We see AI threat to music labels already discounted and a chance to reposition AI as a tailwind. … .Whereas we anticipate SPOT to soak up per-subscriber minimal content material price will increase in ’26, possible beginning in January with not less than WMG, we imagine it may well 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 Prime Choose in September as we noticed the corporate greatest positioned to learn from platformization and AI traits, significantly given valuation, all of which nonetheless stays true. … .We proceed to love setup on the inventory as we progress by means of CY26, believing there may be nonetheless significant upside to outcomes because the 12 months turns into extra back-end loaded, acquisitions shut/combine, and AI turns into a stronger tailwind.” Western Digital “Getting into subsequent 12 months, we have now an OW-bias to (1) firms with publicity to the energy in Cloud Capex/Public Cloud spending – WDC/STX/ SNX. … .WDC stays our Prime Choose 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 acquired incrementally higher..”
