Morgan Stanley’s 15 Stock Picks for 2023

Swati Goyal
17 min read

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In this article, we will take a look at Morgan Stanley's top 15 stock picks for 2023. For more Morgan Stanley stocks, head on over to Morgan Stanley's 5 Stock Picks for 2023.

The equity market roared to life early in the year as chatter about the US Federal Reserve cutting interest rates at the end of the year came as a big relief to the investment community. Waning inflationary pressure, solid economic reports and better-than-expected earnings reports gave investors a reason to ramp up positions, taking advantage of subdued valuations.

By the end of the first quarter, the Nasdaq 100 had recouped a significant chunk of 2022 losses and registered an 18% gain. The S&P 500 was also up by about 7.5% as it became clear investors were increasingly taking advantage of the depressed valuations after the rout experienced in 2022.

Analysts at Morgan Stanley have been bullish about the equities, impressed by earnings results and improving economic conditions. The analysts expect the impressive run in the market to continue heading into year-end and into next year. In a research note to investors, the investment bank analysts expect sales growth of 3% to 4% in most stocks in the fourth quarter, which should continue into 2024. The analysts also expect earnings per share growth of 12%.

The sentiments come from the analysts reiterating that artificial intelligence continues to create a multitrillion-dollar opportunity.

"While much of the early discussion on the use of Generative AI since the launch of ChatGPT late last year focused around the consumer opportunity, we see perhaps a more foundational opportunity in the ability for Generative AI to expand the scope of what types of work and business processes can now be automated with enterprise software," said Keith Weiss, Morgan Stanley analyst

Some big winners amid the generative AI revolution include software giants like Microsoft Corporation (NASDAQ:MSFT) and Adobe Inc. (NASDAQ:ADBE), which are already on a roll amid the boom. The investment bank expects IT internet and semiconductor giants like Nvidia and Alphabet to capitalize on the AI boom.

Some of Morgan Stanley's top stock picks also include big tech names that the analyst expects to outperform in the coming year. The investment bank leverages fundamentals and quantitative analysis to settle on these stocks. In the last year alone, its list of top stocks returned 19.49%, beating the S&P 500 by 9.41%.

Morgan Stanley's 15 Stocks Picks for 2023

Source:unsplash

Even as Morgan Stanley remains bullish about high-growth stocks heading into year-end, it warns of the need to seek safer hideaways as the economic activity peaks. Investment bank analysts believe investors should pay attention to defensive sectors such as healthcare and utilities that consistently outperform even on economic slowdowns.

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