Key Takeaways
- Affirm receives top-pick status from Morgan Stanley, viewed as undervalued ahead of its May 12 investor forum
- UnitedHealth earns top-pick designation following impressive Q1 2026 performance and enhanced annual guidance
- Meta Platforms stands as Morgan Stanley’s favored large-cap technology selection before April 29 quarterly results
- CrowdStrike achieves top software pick status after crossing $5 billion in ARR with expanding growth momentum
- Seagate Technology gains preference over Western Digital due to margin growth trajectory and AI storage positioning
Morgan Stanley has identified five stocks as preferred selections for 2026. These companies span different market segments while sharing common characteristics: demonstrable earnings momentum, upcoming catalysts, and upside potential the firm believes remains under-recognized by the broader market.
Financial Services and Healthcare Sectors
Affirm
James Faucette, Morgan Stanley analyst, highlighted Affirm as undervalued, arguing that worries surrounding private credit exposure appear excessive. The firm’s buy now, pay later business represents the foundation of the positive investment case.
The May 12 investor forum represents a potential catalyst, offering management an opportunity to elevate medium-term projections. The company’s third-quarter fiscal 2026 earnings release is scheduled for May 7.
UnitedHealth Group
On April 16, Morgan Stanley elevated UnitedHealth to top-pick status, anticipating consistent quarterly performance following improved Medicare Advantage rate determinations.
UnitedHealth Group Incorporated, UNH
The healthcare giant delivered Q1 2026 adjusted earnings of $7.23 per share on revenue of $111.7 billion, surpassing analyst projections. Management increased full-year guidance to above $18.25 per share.
Technology, Enterprise Software, and Data Storage
Meta Platforms
Morgan Stanley designated Meta as its preferred choice ahead of major technology earnings releases. Analysts see superior earnings growth prospects compared to competitors, with AI capabilities enhancing advertising effectiveness throughout its ecosystem.
Meta will release Q1 2026 financial results on April 29. The company’s most recent annual filing revealed 22% revenue growth in 2025, with executives projecting 2026 operating income will surpass 2025 figures despite substantial infrastructure spending.
CrowdStrike
Morgan Stanley elevated CrowdStrike to Overweight in March while naming it the leading software selection. Analysts believe the company holds exceptional positioning to continue capturing market share within cybersecurity.
The Falcon Flex platform combined with endpoint security capabilities underpin this assessment. CrowdStrike exceeded $5 billion in ending ARR, achieved 24% ARR growth, and delivered its inaugural full year of positive GAAP net income alongside record free cash flow generation.
Seagate Technology
Morgan Stanley currently favors Seagate above Western Digital within the hard disk drive segment. Analysts point to superior gross margin expansion potential and enhanced positioning in high-capacity drive markets.
The central thesis holds that hard drives represent an undervalued beneficiary of AI-driven data proliferation and cloud storage requirements. Seagate’s fiscal Q3 2026 results arrive on April 28, representing what Morgan Stanley views as a critical validation point for its analysis regarding pricing strength and supply constraints.
Seagate’s forthcoming earnings announcement represents the nearest-term catalyst among Morgan Stanley’s selections, with results expected within one week.
