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Broadcom (AVGO) reports fiscal Q3 2026 earnings after the close on Wednesday, Sept. 2. The numbers will almost certainly be extraordinary. The real question, and Morgan Stanley spelled it out, is whether extraordinary is enough. That’s the setup heading into Q3. Not “Can Broadcom deliver?” but whether it can clear a bar that some investors have quietly set at more than $150 billion in AI revenue for fiscal 2027. Morgan Stanley models $120 billion. The gap between those two numbers is where near-term volatility lives. Remember, Q2 was a great reminder that very strong results are not necessarily enough when expectations are high. The firm maintains its Overweight rating on AVGO, according to a note shared with me at TheStreet. But it’s worth reading the note’s headline: “The main risk into the print is expectations rather than fundamentals.” Also Read: Broadcom Inc. Latest News and Stories The July quarter estimates from Morgan Stanley are detailed and sit roughly in line with Street consensus, according to the note. Revenue is modeled at $29.4 billion, up 84.3% year over year (YoY) and 32.5% quarter over quarter (QoQ). AI revenue specifically is modeled at $16.0 billion — up 48% sequentially — split between $10.8 billion in custom ASIC revenue and $5.2 billion in AI networking. Gross margin estimate sits at 74.0%, slightly above the Street’s 73.5%. EPS estimate is $3.24, a touch ahead of consensus at $3.22. That’s an impressive quarter by any historical measure. But take a second to look at this other one. Broadcom already posted AI semiconductor revenue of $10.8 billion, up 143% YoY in Q2 fiscal 2026, and CEO Hock Tan guided Q3 AI revenue to grow “over 200 percent year-over-year to $16.0 billion,” according to Broadcom’s Q2 report. Related: BMO sees writing on the wall for Broadcom stock after earnings So $16 billion in Q3 AI revenue isn’t really upside. I see it as the floor management already set. For October quarter guidance, Morgan Stanley models revenue of $34.8 billion, up 93.4% YoY, with AI revenue accelerating another 32% sequentially to $21.2 billion, according to the note. Now that’s the number where real upside surprise could live. A more important conversation sits here, and it’s not about this quarter at all. Broadcom previously guided fiscal 2027 AI revenue “well above” $100 billion, according to Reuters. Management sounded increasingly confident last quarter, including signals that growth should persist “well into 2028.” Morgan Stanley models roughly $120 billion for fiscal 2027, according to the note. Some investor expectations have drifted to $150 billion or higher. More AI Stocks: Wells Fargo strongly resets Marvell stock target before earnings Marvell’s $120 billion deal with Google has fine print Analyst rethinks Nvidia stock ahead of earnings I don’t see the spread between $120 billion and $150 billion as just a forecasting debate. It’s a valuation debate. At $120 billion, AVGO looks reasonably priced at current levels. At $150 billion, the stock looks cheap. If Sep. 2 guidance implies $120 billion, investors expecting $150 billion will be disappointed, regardless of how good the quarter actually was. Even Morgan Stanley mentioned this dynamic in the note: “The underlying business can continue to perform exceptionally well without necessarily exceeding the most aggressive expectations.” That’s a politely worded warning about setup risk. The other overhang question worth addressing is whether Google is diversifying its custom chip suppliers away from Broadcom. Recent reports have pointed to MediaTek participation in Tensor Processing Unit (TPU) programs, AMD involvement in TPU v10, and Marvell‘s warrant agreement with Google as signals that the hyperscaler is broadening its ecosystem. Morgan Stanley’s position is unchanged, according to the note. Supplier diversification is real, but Broadcom’s incumbency advantage is very strong. The firm expects Broadcom to retain roughly 80% of its longer-term TPU opportunity, even as Google adds alternative suppliers. The analyst’s framing was that “If anything, the number of semiconductor companies positioning around TPU underscores the scale of the opportunity.” That’s an important reframe. When multiple major chip companies are racing to win a slice of a single customer’s custom silicon program, it doesn’t mean the opportunity is shrinking. It means the opportunity is large enough that everyone wants in. AVGO sits as Morgan Stanley’s second-ranked AI compute name, behind only Nvidia (NVDA), which the firm calls its top pick, according to the note. There’s one more piece of context worth noting. The semiconductor sector just reported 142% YoY earnings growth in Q2 2026. In fact, this sector was the largest contributor to Information Technology sector earnings growth, based on FactSet data as of Aug. 28, 2026. If semiconductors were excluded from the IT sector calculation, blended IT earnings growth would fall from 75.3% to 38.3%. That’s how dominant the chip cycle has been. Broadcom is at the center of that cycle. AVGO shares were up 7.40% year to date compared to the S&P 500’s 12.28% gain as of the close of August, according to Yahoo Finance. The stock has returned 25.44% over the past year and 316.02% over three years. Year-to-date underperformance relative to the index reflects the post-Q2 sell-off that followed an earnings beat. It’s a perfect illustration of the expectations risk Morgan Stanley is flagging again heading into Q3. The business is exceptional. The bar is high. Those two things can both be true simultaneously, and on Sept. 2, we will find out which one matters more. Related: Morgan Stanley: Broadcom bears are wrong about Google TPU This story was originally published by TheStreet on Sep 1, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

Most investors have never heard of Ciena. Most investors also don’t know what actually powers the Internet’s massive highway system. Ciena builds the engines that drive it. And right now, the world needs more of them than it can get. The 34-year-old Hanover, Maryland, company makes high-speed optical networking equipment. Those are the specialized hardware and software that shoot data across long distances at the speed of light. Telecommunications companies, cloud giants, and governments all depend on them. And with AI data centers multiplying faster than power grids can handle them, the demand for Ciena’s technology is accelerating in ways that weren’t fully visible even 18 months ago. Ciena reports fiscal Q3 2026 results on Sept. 3. Morgan Stanley shared a preview note laying out exactly what to watch and why the results might be more important than the headline numbers suggest. The firm maintains an Equal-Weight rating with a $490 price target, according to a note shared with TheStreet. That’s not a ringing buy call. But it’s a constructive setup heading into a print the firm explicitly describes as having “positive catalysts.” Also Read: Ciena Corporation Latest News and Stories Here’s the dynamic at the centre of the Ciena story, and it’s worth understanding before the Sept. 3 numbers land. Ciena is not supply-constrained because demand is weak. It’s supply-constrained because demand is outrunning its ability to source optical components, particularly pump lasers, which are critical to its networking hardware. Lumentum (LITE) is one of Ciena’s key suppliers, and LITE reported pump-laser shipments up more than 80% year over year last quarter, with plans to increase volumes roughly fourfold over the coming quarters, according to the Morgan Stanley note. New long-term agreements between suppliers and Ciena should improve supply visibility, but not in time to meaningfully impact Q3. More AI: Nvidia just made a move Wall Street wasn’t ready for Microsoft just took sides in AI policy fight OpenAI just disclosed something genuinely alarming What that means for you as an investor is that the revenue number matters less than the backlog number. Backlog represents orders Ciena has won but can’t yet ship due to component constraints. In Q2, backlog grew by $600 million. Morgan Stanley expects Q3 backlog growth to exceed that figure, according to the note. If it does, it would signal that the demand is accelerating even as near-term revenue conversion remains limited. My read is that a backlog beat is the most important signal in this print. It offers an early look at what fiscal 2027 revenue could look like before supply constraints fully normalize. According to Morgan Stanley’s note, its specific Q3 bogeys are approximately $1.69 billion in revenue, a 45.5% gross margin, and a 21% operating margin. A clean print also requires Q4 guidance of approximately $1.73 billion in revenue with similar margin parameters. Here’s the part of the Morgan Stanley thesis that I find most interesting, and most underappreciated by the market. Everyone knows AI data centers require enormous amounts of connectivity. The conventional assumption is that this means building massive centralized campuses. Morgan Stanley’s thematics team is pushing back on that assumption, according to the note. Related: Morgan Stanley resets CIEN stock target after earnings Political opposition and power constraints are rising non-linearly with campus size. The bigger the proposed campus, the harder it becomes to permit and power it. The result, according to the note, is that workloads may increasingly be distributed across smaller, geographically dispersed sites, which then need to be interconnected over long-haul optical networks. That’s exactly what Ciena builds. If the mega-campus model hits structural limits, the scale-across optical networking opportunity doesn’t shrink. It potentially expands. The Nvidia long-haul network build reinforces this thesis. Nvidia’s infrastructure project includes more than 8,000 miles of new fiber across 16 U.S. routes and targets 15,000 new route miles through 2030, according to Morgan Stanley’s note. Ciena is well-positioned to capture equipment orders as those routes are lit. Morgan Stanley estimates the total CIEN opportunity from this build at less than $1 billion over multiple years. That’s roughly one-quarter to one-third the size of Lumentum’s deals with Meta and Microsoft, with initial deployments expected as early as 2027, according to the note. It’s not a near-term catalyst. But it’s a real, named pipeline item that the Street hasn’t fully modeled. Ciena’s most recent quarter, reported June 4, was genuinely impressive. Revenue reached $1.57 billion, up 40% year over year (YoY). Adjusted EPS came in at $1.64, up 290% YoY. The company raised its full-year fiscal 2026 revenue guidance to $6.3 billion, representing 32% YoY growth at the midpoint. CEO Gary Smith mentioned this in Ciena’s Q2 statement. “Our long-term strategy to be the global leader in high-speed connectivity is tightly aligned to the structural, multi-year opportunities created by AI-driven demand.” Ciena’s own guidance calls for $1.625 billion in revenue, an adjusted gross margin of around 45%, and an operating margin between 19% and 20%. Morgan Stanley’s bogey of $1.69 billion sits above that guidance midpoint. The firm is modeling upside relative to management guidance, according to Ciena’s Q2 statement. CIEN shares were trading at $378.44, down 5.35% on the week ended Aug. 28, but up 61.82% year to date and 286.60% over the past year, according to Yahoo Finance. Morgan Stanley’s $490 target, based on 37x its 2028 EPS estimate of $13.26, implies roughly 29% upside from current levels. The Equal-Weight rating reflects near-term caution on optical sector multiples, not a fundamental concern about the business. The Sept. 3 print gives us the chance to see whether the backlog inflection Morgan Stanley expects actually shows up in the numbers. Related: Morgan Stanley rattles investors with bombshell HP stock verdict This story was originally published by TheStreet on Aug 31, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

Anytime a stock jumps 20% in a single session after earnings, Wall Street analysts have a choice to either chase the move or hold their ground. Morgan Stanley chose the latter. Elastic (ESTC) closed the week ended Aug. 28 at $99.91, up 19.31% following its Aug. 27 first-quarter fiscal 2027 earnings release, according to Yahoo Finance. The jump isn’t just about one strong quarter. Elastic is riding two trends that are becoming hard for businesses to ignore: the rapid rise of artificial intelligence (AI) and the growing need to make sense of all the data companies collect. That’s where Elastic comes in. Its platform helps companies search, analyze, and visualize data across cloud, private, and hybrid environments, increasingly giving businesses the tools to put AI to work. Many refer to it as the Google of corporate search. The 14-year-old Elastic beat guidance across every key metric, raised its full-year outlook, and delivered record customer additions in its highest-value cohort. Morgan Stanley reviewed the results in a note shared with me at TheStreet. The note’s headline, “Now That’s More Like It,” was unusually candid for a firm maintaining a neutral stance. Morgan Stanley raised its price target to $75 from $66 while keeping its Equal-weight rating. With the stock already trading at $99, Morgan Stanley is essentially saying that, although it’s a great quarter, they are not chasing it here. Also Read: Elastic N.V. Latest News and Stories As mentioned, the Q1 fiscal 2027 results, reported Aug. 27, were strong across every metric that matters for an enterprise software company. Total revenue of $478 million grew 15% year over year. (YoY) Cloud revenue of $235.2 million grew 20% on a constant-currency basis, accelerating from 19% in Q4. Sales-led subscription revenue of $398.5 million grew 17% on a Constant-currency basis, accelerating from 16% in Q4. Current remaining performance obligations grew 21% year over year to $1.153 billion. Total RPO grew 27% YoY to $1.854 billion. Adjusted free cash flow was $143 million. One customer metric stands out. Elastic added 80 customers with more than $100,000 in annual contract value sequentially, the highest net addition quarter on record. The cohort now totals more than 1,800 customers, up 16% year over year. “AI is reshaping the enterprise technology stack,” said CEO Ash Kulkarni in the earnings statement. “Our record quarter-over-quarter net customer additions reflect the durability of that demand.” Full-year fiscal 2027 revenue guidance was raised by approximately $12 million, between $1.998 and $2.010 billion, exceeding the $9 million first-quarter beat. Management said they expect acceleration in the second half, with Q4 carrying the highest year-over-year growth rate. Morgan Stanley’s note was quite specific about both the positives and its remaining hesitation. On the positive side, Morgan Stanley likes cloud acceleration to 20% constant currency despite a tough year-over-year comparison, sales-led subscription growth accelerating for the second consecutive quarter, a strong pipeline from recent go-to-market investments, and a fiscal 2027 guidance raise that exceeded the Q1 beat. More AI: Nvidia just made a move Wall Street wasn’t ready for Microsoft just took sides in AI policy fight OpenAI just disclosed something genuinely alarming The specific callout on Elastic’s business mix is this. Management cited Search and Security as growing above the overall company growth rate, while Observability is growing more slowly. Morgan Stanley flagged that it wants to see more traction in Observability specifically before gaining confidence in a multi-year acceleration. That is the one missing piece preventing the firm from upgrading. The key concern is familiar in enterprise software: Consumption-based cloud revenue is notoriously difficult to extrapolate. Bears point to Elastic’s history of one-off acceleration quarters that failed to sustain. Bulls point to the contracted backlog already sitting in the cRPO balance that provides revenue visibility for the sales-led subscription segment. “A cc accel across rev, cloud and sales-led subscription plus a raise to the FY27 rev outlook that was initially deemed aggressive should get rewarded,” Morgan Stanley wrote. “The debate ahead is whether the cloud accel is fundamentally durable and we are not yet convinced on that front.” Let’s step out of financials for a minute. Elastic’s product announcements during Q1 show that it has found its footing in the AI infrastructure stack. The company delivered general availability of native Prometheus and PromQL support, introduced Columnar Mode for analytics workloads, launched VectorDB index mode for instant vector search, and introduced an agentic Kubernetes investigation workflow. In security, Attack Discovery and Alert Zero both advanced, targeting the AI-powered security operations center. Elastic also unveiled its collaboration with OpenAI to bring advanced reasoning models with governed enterprise context into Elasticsearch. Related: Morgan Stanley sees big change coming for Alphabet stock The Gartner recognition validates the progress. Elastic became a leader in the Observability Platforms Magic Quadrant for the third consecutive year, and in the IDC MarketScape for SIEM 2026, according to Elastic’s Q1F27 results. The Deductive AI acquisition, which brings AI-powered production issue investigation to Elastic Observability, addresses the one segment Morgan Stanley is still watching. ESTC is up 32.44% year to date and 13.81% over the past year, according to Yahoo Finance. Morgan Stanley’s $75 price target implies the stock has run meaningfully ahead of where the firm is comfortable endorsing it at this stage of the acceleration debate. My read of that stance is that the quarter was genuinely impressive and that the setup for 2H is credible. Yet a 19% single-day move takes the stock well above the valuation that Morgan Stanley is willing to support with an Overweight. For investors willing to bet that the cloud acceleration is durable rather than a one-off, Elastic’s Q1 gave the bull case its strongest evidence. Morgan Stanley is encouraged by the strong start to FY27, but is asking for one more quarter of proof before it agrees. Related: Morgan Stanley sends a blunt Tesla message to investors This story was originally published by TheStreet on Aug 29, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

While digging through CrowdStrike’s earnings report, I came across an interesting comment from CEO George Kurtz that caught my attention. I don’t see it as standard earnings language. Why? It’s a statement about category ownership. A claim that every enterprise deploying AI now understands it needs to secure that AI, and that CrowdStrike is the company they’re calling first. The numbers from FQ2 themselves suggest that claim isn’t just marketing. CrowdStrike just delivered what Kurtz called “the best quarter in CrowdStrike’s history.” Morgan Stanley followed up by raising its price target to $238 from $227, maintaining its Overweight rating, in a note shared with me at TheStreet. Morgan Stanley calls CrowdStrike a “clear secular winner.” And looking at the latest data, that bullish case may be more compelling than it has been in years. Also Read: CrowdStrike Holdings Inc. Latest News and Stories The headline number that moved Morgan Stanley’s conviction wasn’t the normal revenue or guidance or anything. It was net new annual recurring revenue (ARR). CrowdStrike delivered record Q2 net new ARR of $333 million, up 51% year-over-year (YoY) — beating Street expectations by 17% and coming in above even the more aggressive buy-side estimate of roughly $310 million, according to the note. Total ARR reached $5.84 billion, up 25.4% YoY. I’ll quote it directly from the note: the quarter “extinguished concerns around how long it would take for the increased threat environment to turn to customer traction.” More CrowdStrike Holdings: CrowdStrike Holdings Q2 2027 Earnings: Recap of $CRWD Earnings Call, Forecast CrowdStrike needs more than a beat to keep investors happy 5 Top Stock Gainers for Tuesday: Best Buy, Palo Alto Networks Investors had worried that the intensifying cybersecurity threat landscape was showing up in theory, but not yet translating into stronger bookings. FQ2 put that concern to rest. Revenue grew 26% YoY to $1.47 billion, approximately 2% above consensus. Operating margin came in at 25.3%, beating Street by roughly 110 basis points. Free cash flow margin hit 25.7%, above management’s own 24.5% expectation, according to the note. CrowdStrike Management responded by raising FY27 net new ARR growth guidance by 630 basis points to 34% YoY at the midpoint, lifting the FY27 ARR midpoint to approximately $6.607 billion, according to CrowdStrike’s statement and the note. I’ve been lowkey watching CrowdStrike’s AI Detection and Response product since it launched back in Dec. 2025, and the Q2 update reframed my thinking about how big this opportunity actually is. AIDR ARR nearly tripled Quarter-over-quarter (QoQ) in FQ2, according to the Morgan Stanley note. Related: CrowdStrike, AWS race to fix enterprise AI security blind spot That’s a product finding product-market fit in real time. AIDR monitors, detects, and investigates threats targeting or originating from AI systems at runtime. As every enterprise deploys AI, it creates a new attack surface that AIDR is specifically built to protect. Digging deeper, I find that Morgan Stanley made a statement in the note that I find genuinely striking. They described AIDR as having “the potential to be bigger than EDR eventually.” Endpoint Detection and Response built CrowdStrike into a $200-plus stock. If AIDR scales to that level, the current valuation looks different. The broader platform metrics confirm that customers aren’t just buying one solution. Module adoption grew to 51% of subscription customers using six or more modules, 35% using seven or more, and 26% using eight or more, according to  CrowdStrike’s statement. Combined ARR for Next-Gen SIEM, Cloud, and Identity exceeded $2.18 billion, up more than 39% YoY, according to the note. Falcon Flex ARR surpassed $2.29 billion, growing 101% YoY. Morgan Stanley’s revised $238 price target is based on a 60x multiple of its CY30 free cash flow estimate of $5.44 billion per share, discounted back at a 12% weighted average cost of capital, according to the note. That valuation translates to roughly 34 times CY27 sales — an exceptionally rich premium to high-growth software and security peers, a point the firm explicitly acknowledges. Related: Goldman Sachs aggressively resets CrowdStrike stock price target I think the AIDR and Falcon Flex dynamics are the two strongest pillars of the bull case right now. AIDR because it represents a genuinely new and expanding market that didn’t exist two years ago. Falcon Flex because ARR uplift on re-Flex customers is running approximately 25%, according to the note — meaning existing customers who convert to the flexible consumption model are spending more, not less. The risk I’d watch most closely is the competitive dynamic. CrowdStrike operates at premium pricing in a market where lower-cost alternatives are improving. As long as AIDR and platformization continue to drive module depth, pricing power holds. If either stalls, the multiple compresses fast. Related: Morgan Stanley reveals Cisco’s quiet edge over rivals CRWD shares were trading at $217.88, up 85.90% year-to-date and 97.16% over the past year, according to Yahoo Finance data as of Aug. 28, 2026. Kurtz said Q2 was the best quarter in company history. Morgan Stanley raised its target. CrowdStrike heads into its Fal.Con 2026 cybersecurity conference next week from Aug. 31 to Sep. 3, 2026 with a record Q3 pipeline and a threat environment that, by all accounts, is getting more complex. Not less. Related: Morgan Stanley sees big change coming for Alphabet stock This story was originally published by TheStreet on Aug 29, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

Morgan Stanley MS delivered a strong first half of 2026, with net revenues rising 21% year over year to $41.93 billion and net income jumping 42% to $11.15 billion. Earnings per share increased 46% to $6.90, while the return on tangible common equity (ROTCE) improved to 26.8% from 20.6% in the prior-year period.The Institutional Securities (IS) segment was the major growth driver, supported by robust investment banking (IB) and trading activity. IB revenues rose 47% year over year, aided by stronger M&A advisory and underwriting volumes, while trading revenues increased 36% on higher client activity. The momentum was particularly evident in the second quarter of this year, when IS segment revenues jumped to a record $11 billion.The Wealth Management (WM) segment also delivered solid growth in the six months ended June 30, 2026, supported by higher asset levels, fee-based inflows, lending activity and client engagement. Second-quarter revenues reached a record $8.9 billion, while the business attracted $148 billion of net new assets. Investment Management (IM) also benefited from higher assets under management (AUM) and positive flows.Overall, Morgan Stanley’s improving efficiency, strong asset gathering and solid capital position drove its impressive first-half results. Supported by this robust performance, along with improving investor sentiment, resilient U.S. consumer spending and continued heightened market activity, MS shares have gained 22.1% year to date, outperforming the S&P 500 Index’s 11.5% growth and the industry’s 11% rise.If we compare MS’ price performance with two of its closest peers, JPMorgan JPM and Goldman Sachs GS, it appears that MS has outperformed both JPMorgan and Goldman Sachs. So far this year, shares of JPMorgan have gained 10.7% and Goldman Sachs stock has rallied 20.5%. Image Source: Zacks Investment Research Given the impressive price performance, investors might be tempted to invest in the MS stock now. But before making any investment decision, investors should assess whether there is further upside left in the stock despite risks from market volatility. In order to understand this, let us dig deep into the company’s fundamental strengths and growth prospects. Improving Diversification: Morgan Stanley has continuously been trying to reduce its reliance on capital markets, which it has been achieving by expanding wealth and asset management. Also, it has been using acquisitions (Eaton Vance, E*Trade Financial, Shareworks and EquityZen) to broaden its mix and have a more balanced revenue stream across market cycles. The wealth and asset management businesses continue to broaden the company’s revenue base and deepen client relationships.Both businesses’ aggregate contribution to total net revenues jumped to almost 54% in 2025 from 26% in 2010. The WM segment’s total client assets witnessed a five-year (2020-2025) compound annual growth rate (CAGR) of 13%, while the IM segment’s total AUM saw a CAGR of 19.4%.As of June 30, 2026, total client assets across both segments were $10 trillion, reaching a milestone. This progress reflects strong momentum across Morgan Stanley’s advisor-led, workplace and self-directed platforms, while highlighting its expanding scale in the retirement savings market. The trend is likely to continue in the near term as the operating environment becomes more favorable.IB Recovery: After the deal slowdown that weighed on results in 2022 and 2023, Morgan Stanley's IB franchise continues to recover as issuance and strategic activity improve. IB fees rose 35% in 2024 and 23% in 2025 as boardroom confidence improved and issuance reopened. As mentioned above, the upward momentum carried into the first half of 2026.Looking ahead, the company is well-positioned to benefit from a healthier deal environment, supported by a robust and diversified pipeline across regions and sectors. Momentum is expanding beyond the Americas into Asia and EMEA, while active M&A and IPO markets, together with the company’s strong competitive position, should support further growth as the macroeconomic backdrop evolves.  Expanding Global Reach: Morgan Stanley’s alliance with Mitsubishi UFJ Financial Group continues to enhance its competitive position in Japan through combined research, sales and execution and coordinated underwriting. This supports a durable franchise in a key market and helps extend coverage across the region.Asia revenues were $9.42 billion in 2025, up 23% year over year. The momentum carried into the first six months of 2026, aided by stronger client engagement, favorable market conditions and higher prime brokerage activity in the region.The company's global platform is increasingly relevant as capital markets activity broadens outside the United States and across Japan, India, China, Korea, Taiwan and Hong Kong. Continued investment in regional leadership and collaboration should support wallet share gains across Asia's capital markets and wealth opportunity set.Robust Balance Sheet Position: As of June 30, 2026, the company had long-term debt of $383.2 billion, with $34.3 billion expected to mature over the next 12 months. The company’s average liquidity resources were $404.1 billion as of the same date.Given its solid liquidity position and earnings strength, Morgan Stanley has been engaged in efficient capital distribution activities, through which it enhances shareholder value.Following the clearance of the 2026 stress test, the company increased its quarterly dividend 15% to $1.15 per share. Before this, the company had hiked its quarterly dividend 8% in 2025. Also, its board of directors has reauthorized a multi-year share repurchase program of up to $20 billion, without an expiration date. Management continues to emphasize disciplined capital allocation, with a preference for organic investment, capital returns and selective bolt-on acquisitions only where strategic and cultural fit are strong. On a valuation basis, shares of Morgan Stanley appear to be trading at a premium relative to the industry. The company’s forward 12-month price/earnings (P/E) ratio of 16.72 is above the industry average of 13.97. Image Source: Zacks Investment Research JPMorgan has a P/E (F12M) ratio of 14.28, and Goldman Sachs has a forward 12-month P/E ratio of 14.89. Thus, Morgan Stanley is overvalued compared with its two closest peers as well.If we look at Morgan Stanley’s earnings estimate revisions, it appears that analysts are optimistic regarding the company’s growth. Over the past 30 days, the Zacks Consensus Estimate for the company’s 2026 and 2027 earnings has been revised upward. The earnings estimate for 2026 of $12.79 indicates a rise of 25.3% from that reported in the previous year. The 2027 estimate of $13.06 suggests year-over-year growth of 2.1%. Image Source: Zacks Investment Research Morgan Stanley’s continued efforts to reduce the dependence on volatile capital markets-driven revenues by strengthening its wealth management and investment management businesses will continue to support growth in the long run because these segments generate more stable, recurring fee income.Its solid balance sheet and strong capital position provide flexibility to invest in growth initiatives, pursue strategic opportunities and return capital to shareholders.The company’s premium valuation seems justified by its business transformation and strong earnings stability. With multiple growth levers in place, including expansion in fee-based businesses, disciplined cost management and strategic investments, the company appears well-positioned to sustain financial performance and deliver stable revenue growth over the long term, making it an attractive investment option now.Currently, Morgan Stanley sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Morgan Stanley (MS) : Free Stock Analysis Report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Amazon spent years telling Wall Street that AWS could become a few hundred billion dollar revenue business. Then on its last earnings call, management revised that estimate up, significantly. The new figure was $1 trillion. Not as a stretch goal. As what they now believe is a real possibility. Morgan Stanley just shared a note with TheStreet that tries to answer the question that number raises: how far away is it, and what does it mean for the stock if the math actually works out? In a note shared with TheStreet on August 16, Morgan Stanley analyst Brian Nowak laid out what a $1 trillion AWS business would mean for Amazon shareholders. The firm raised its price target to $335 from $330 after Amazon's Q2 earnings, representing roughly 27% upside from Amazon's $262.65 close on August 14. The Overweight rating is unchanged, as TheStreet reported. More Amazon: JPMorgan resets Amazon stock target after AI payoff Amazon CEO Jassy may deliver a July 30 AWS earnings shock Amazon stock slides as Prime Day data reveals shopper shift ahead of earnings But the note is really about a longer-range scenario. If AWS can reach $1 trillion in annual revenue and maintain margins consistent with what cloud computing has historically delivered, Morgan Stanley sees a path to $500 per share by year-end 2027. That is not the firm's official forecast. It is a valuation exercise built on capacity, monetization and margin assumptions. The bull case is $500. The $335 base is where Morgan Stanley actually plants its flag. The note's broader message is that even the base case implies meaningful upside, and the conditions needed to push toward $500 are already starting to show up in the quarterly numbers. The note was prompted by what Amazon management said on the Q2 earnings call. The quote is worth reading directly. "We long believed AWS could become a few hundred billion dollar revenue business," Amazon said, "and now believe it'll be at least double that, and very possibly be $1 trillion annual revenue business for us in time with very appealing accompanying free cash flow and return on invested capital." Management also addressed the margin question directly. "We've done this before in the first era of cloud computing, just over a longer time horizon where demand built more gradually than it has in AI. But we see the margins and returns in AI tracking what we saw with core at the same point of evolution. Actually a little ahead." Related: Jeff Bezos just named Amazon's next big pillar That commentary is the foundation of Morgan Stanley's model. AWS revenue grew 37% year over year in Q2, its fastest growth in 18 quarters, with the AI and custom chips businesses each surpassing a substantial annualized revenue run rate, according to CNBC. If margins in the AI era track historical cloud economics, as Amazon management suggests, then a $1 trillion AWS becomes a very large profit engine rather than just a large revenue line. Morgan Stanley's note is explicit about what actually determines how fast AWS gets to $1 trillion. It is not demand. Demand looks strong. The constraint is whether Amazon can bring enough computing capacity online fast enough to meet it. Six gigawatts of new compute this year. Eight next year. Then eight a year after that, indefinitely. That's the capacity schedule the note builds the whole model around. Amazon raised its full-year capital expenditure forecast to roughly $220 billion to fund it, with AI infrastructure making up the majority of the increase, according to Quartz. Beyond next year the note admits the picture gets murky. Power, construction, servers, labor. Any of those can create a bottleneck. But Morgan Stanley's read on Amazon's current execution is that the annual cadence it models is achievable. Capacity alone doesn't get AWS to $1 trillion. What matters is how much revenue comes out of each watt of that capacity. The note puts AWS at roughly $8 in revenue per incremental watt right now. That number needs to go up. The note expects it to, driven by more valuable AI workloads and better compute pricing. At higher monetization rates the model shows AWS reaching $1 trillion as early as 2034. At the base assumption the milestone arrives around 2035. The note projects strong AWS revenue growth through the end of the decade before moderating as the base gets larger. If AWS margins in the AI era track historical cloud economics, a $1 trillion revenue line produces hundreds of billions in operating profit. Layer in the retail business and total Amazon operating profit could approach a figure that would make it one of the most profitable companies on earth. The risks are real and the note names them. Amazon's AI infrastructure spending is already pressuring free cash flow, which swung to an outflow on a trailing 12-month basis through Q2 as property and equipment purchases jumped sharply year over year. Monetization may not rise as fast as the model assumes. Competition could pressure pricing. Regulation could slow construction. None of those risks disappear because Amazon said $1 trillion and Morgan Stanley built a model around it. AWS is already the largest cloud business in the world, it is growing at its fastest rate in 18 quarters, and the AI infrastructure cycle is still in its early stages. The $500 scenario is the outcome if a lot of favorable trends continue at once. The $335 base case is the outcome if they just continue normally, according to Amazon's official Q2 earnings release. For investors, Morgan Stanley's message is that either way, Amazon's biggest opportunity may no longer be selling more products online. Related: Bank of America resets Amazon stock forecast on key service launch This story was originally published by TheStreet on Aug 17, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

Morgan Stanley sees U.S. corporate earnings momentum spreading well beyond the largest technology companies, creating opportunities in quality stocks, artificial intelligence adopters, large-cap financials and consumer discretionary goods. Strategists led by Michael Wilson argue that investors are also becoming more selective, increasingly rewarding businesses that combine earnings growth with strong free cash flow and operating efficiency. Second-quarter results have reinforced Morgan Stanley’s view that corporate profit growth is becoming increasingly broad-based. Around 87% of S&P 500 companies have beaten earnings expectations this season, up from 82% during the previous quarter. Earnings revision breadth has meanwhile recovered to 23%, while 76% of industry groups are recording positive revisions. Both measures are close to their cyclical highs. “The key point is that earnings strength is no longer confined to a narrow group of megacap stocks,” the strategists said. The improvement suggests a larger proportion of the market could participate in earnings-driven gains rather than performance remaining concentrated among a handful of dominant companies. Evidence of the broadening extends beyond the S&P 500. Median earnings growth for companies in the Russell 3000 has accelerated to 15%, its strongest rate since 2021. Median sales growth has reached approximately 8%, close to its best level since 2023. These figures suggest the improvement is increasingly supported by underlying revenue expansion rather than being driven exclusively by cost reductions or a small group of megacap companies. Morgan Stanley sees an important change in how investors are responding to earnings reports. Companies are no longer being rewarded simply for increasing their profit forecasts. The quality and cash conversion of those earnings are becoming increasingly important. The median S&P 500 company receiving upward revisions to both 2026 EPS and free cash flow outperformed the market by 1.6% on a relative basis following its results. By comparison, companies receiving higher EPS forecasts but lower free cash flow revisions underperformed by 0.2%. The strategists said this divergence demonstrates that “headline earnings growth alone is becoming less sufficient.” Instead, the market is placing a greater premium on durable profits, cash generation and operating efficiency. Artificial intelligence remains an important component of Morgan Stanley’s positioning. The bank’s targeted screen of companies adopting AI has continued to outperform the broader market. Rather than focusing exclusively on businesses supplying the infrastructure behind AI, Morgan Stanley sees opportunities among companies using the technology to increase productivity, lower costs or improve operating performance. Successful AI adoption could therefore become an increasingly important differentiator between companies as investors search for measurable returns from the technology. Morgan Stanley remains overweight financial stocks, particularly large-cap names. Within the sector, the bank favours insurance companies and capital-markets businesses. Improving earnings revisions are one reason for the positive stance, while Morgan Stanley’s market-regime analysis also points towards a supportive environment for the sector. A steeper yield curve could provide another favourable backdrop, although movements in longer-term interest rates remain an important risk. Consumer discretionary goods are another preferred area. Morgan Stanley sees evidence that household spending is shifting towards goods and away from services. Improving pricing trends provide additional support, while earnings revision breadth across the sector has begun recovering. The combination could create an opportunity for consumer goods stocks to close some of their previous performance gap with the broader market. Within technology, Morgan Stanley continues to prefer hyperscalers to semiconductor companies. The bank does not rule out further gains for chip stocks following their recent momentum reset. Semiconductors “can continue to participate tactically following the recent momentum unwind,” the strategists said. For a multi-month investment horizon, however, Morgan Stanley sees a more attractive risk-reward profile among hyperscalers. The strategists highlighted “resilient core businesses, attractive relative valuation and underappreciated optionality around AI-related ROI and adoption.” That combination could allow hyperscalers to benefit not only from continued cloud growth but also from improving returns on their enormous AI investments. Morgan Stanley identified longer-term interest rates and oil prices as the principal near-term risks to its constructive outlook. Two-year Treasury yields have declined from their late-July highs, helping the yield curve steepen. However, a sharp increase in longer-dated yields could create greater difficulties for equities. Whether driven by rising inflation expectations, higher real yields or a combination of both, such a move “could become a more meaningful risk,” according to the strategists. Higher borrowing costs would raise the cost of capital and potentially put pressure on equity valuations. The broadening earnings recovery is giving Morgan Stanley greater confidence that market opportunities extend beyond a narrow collection of megacap stocks. With 87% of S&P 500 companies beating estimates, Russell 3000 median earnings growing 15% and earnings revisions improving across industries, the fundamental backdrop has strengthened considerably. However, investors are becoming increasingly demanding about the quality of that growth. Morgan Stanley consequently favours quality companies with strong free cash flow, AI adopters, large-cap financials and consumer discretionary goods. Within technology, hyperscalers remain preferred over semiconductor stocks for a longer investment horizon. Get stock prices from InvestorsHub

(Bloomberg) -- Anthropic PBC is telling prospective investors its second-quarter revenue jumped at least 14-fold versus the same period a year ago, according to documents seen by Bloomberg News. Most Read from Bloomberg US Readies Unprecedented ‘Economic Isolation’ Plan for Iran Selena Gomez Accused of Fraud by Mental-Health Startup Investors Costliest US Bond Sale Since 2001 Is Investor Warning to Bessent OpenAI’s Annualized Revenue Tops $40 Billion Ahead of IPO Walter Sells Lakers, Seeks More Cash to Pay Loans Amid DOJ Probe The Claude chatbot maker reported a preliminary revenue figure of more than $11.5 billion in its latest completed quarter, compared to $787 million in the corresponding period in 2025, and $4.73 billion in the first quarter of this year, the documents show. The second quarter of 2026 saw Anthropic report positive adjusted operating income, according to the documents. Deliberations are ongoing and the figures could be revised. A representative for Anthropic declined to comment. The rapid growth comes as the company battles its longtime rival OpenAI to win over corporate customers. Once considered an underdog in the artificial intelligence race, Anthropic has seen a surge in professionals adopting its software to streamline tasks including coding. Anthropic’s annualized revenue or run rate crossed $47 billion in May. OpenAI has an annual run rate of over $40 billion, Bloomberg News reported, though the two figures may not be calculated the same way. The company is meeting with investors ahead of its potential mega-IPO, people familiar with the matter said in July. Anthropic filed confidentially for a listing, and is working with Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the IPO, Bloomberg News has reported. Anthropic is seeking to tap the public market’s ample funding capacity to maintain its lead over OpenAI and others, as AI companies spend hundreds of billions of dollars to develop the most cutting-edge models. An IPO this fall would see Anthropic debut not only before OpenAI but also before DeepSeek, the Chinese AI firm that has been grabbing an increasing share of the market for the technology. DeepSeek is preparing for an IPO and could file as soon as this year, people familiar with the matter have said. The AI race has fired up the IPO market, with listings this year raising $256.4 billion, excluding blank-check firms and other financial vehicles, according to data compiled by Bloomberg. That’s the most raised in a year since 2021, the data show. --With assistance from Shirin Ghaffary. Most Read from Bloomberg Businessweek The Optimization Backlash Has Begun The Midwest City Keeping the American Dream Alive for First-Time Homebuyers The Steamy, Magical and Now Very Lucrative Romantasy Business AI Music Startup Suno Bets Anyone Can Be a Rock Star With EV Sales Slowing, Hybrid Cars Are Hot Again ©2026 Bloomberg L.P.