A slate of overweight-rated tech stocks are worth buying ahead of earnings, Morgan Stanley said. CNBC Pro combed through the firm's research to find its top picks heading into quarterly results. They include Fortinet, Microsoft, Apple and Atlassian.
Microsoft Morgan Stanley analyst Keith Weiss is sticking with the tech giant ahead of earnings. Indeed, Microsoft shares are up nearly 14% in 2024, but the firm said the stock is too attractive to ignore at current levels. "Investor sentiment has turned more negative as a 'wall of worry' around Gross Margins, Capex, GenAI monetization and the OpenAI relationship [builds]," Weiss wrote.
The analyst said he remains bullish on the company's cloud computing service Azure, and he reminded investors that Microsoft artificial intelligence tailwinds are tremendous. "Net, we expect to see modest upside in F1Q outperformance, but see the larger lever for stock outperformance being greater investor confidence in the F2H Azure acceleration," he added. The company reports quarterly results on Oct.
30. Atlassian Weiss also said that shares of the software developer remain "compelling." Atlassian's shares are down more than 20% in 2024, but the firm deems it a top pick.
Growth concerns have plagued the stock recently, but Weiss said that these worries are overdone. "We view a path back to 20%+ growth as supported by an expanding product portfolio, increased cross-sell/upsell with marketing re-focus, and sustained pricing power," he wrote. Furthe.