Morgan Stanley has some thoughts on how to invest in telecom and networking equipment stocks heading into 2025. Specifically, Marshall wrote in a research note released last week that stocks viewed as AI enablers have seen significantly larger gains this year. Marshall said that by 2025, companies that are ready to take market share and business relevance in artificial intelligence should see huge gains. On the other hand, the analyst said she is more cautious about service providers now that Wall Street has priced in a business recovery in their stock outlooks. Against that backdrop, here are her favorite names in the industry heading into 2025: Marshall highlighted Nutanix as her top pick for the new year. She noted that the company is closely tied to enterprise business trends, which provides reason for optimism. “We believe the business offers the best opportunity for outperformance,” Marshall told clients in the 94-page report. “Valuations remain reasonable and there is opportunity for positive estimate revisions.” In addition to benefiting from the business, she said In addition to the increased spending, Nutanix could also take market share from Dell Technologies Inc.’s VMware. Marshall raised his price target on Nutanix by $7 to $85, which would imply a 32% upside to the stock from Tuesday’s closing price. According to LSEG, she is in the majority on Wall Street, with most analysts rating Nutanix equivalent to a “buy.” NTNX Year to date, Nutanix will reach its peak in 2024. Meanwhile, Arista Networks is also an AI company in the space and is gaining market share, Marshall said. Marshall’s advice comes amid a strong year for Arista. The stock has nearly doubled, rising about 95% in 2024, roughly matching its 2024 gains. Still, that only reflects a potential upside of about 3% from Tuesday’s closing price after a sharp rise over the past two years. 2024 ANET Year-To-Date Mountain Arista Networks.
Morgan Stanley reveals its most popular telecoms and equipment stocks in 2025 | Real Time Headlines
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