Morgan Stanley

Baker Hughes Company is emerging as a key winner from the AI boom, with its Industrial & Energy Technology segment orders doubling year-over-year to a record $7.1 billion in the second quarter. The company raised its full-year 2026 IET orders guidance to $17.5 billion to $19.5 billion, and the segment has surpassed its 20% EBITDA margin target. Baker Hughes is expanding gas turbine and generator capacity, which could support nearly $5 billion in annual Power Systems revenue by 2029. It recently secured an order for 76 NovaLT16 gas turbines from Dynamis Power Solutions, capable of generating 1.3 gigawatts of mobile power. The acquisition of Chart Industries, completed in July, is expected to add $325 million in annualized cost synergies within three years. Morgan Stanley has named Baker Hughes its top pick in the energy services sector with a $70 price target. However, risks include potential declines in oil and gas spending and delays in data-center projects.

BlackRock has lowered the minimum size for in-kind conversions of Bitcoin into shares of its spot Bitcoin ETF to $1 million from $25 million, making it easier for large crypto holders to move wealth into mainstream finance. The firm's IBIT fund has facilitated more than $5 billion of such conversions, up from over $3 billion last October, according to Robbie Mitchnick, head of digital assets at BlackRock. Bitwise has reduced its minimum from $100 million to $3 million, while Morgan Stanley reports in-kind conversions account for 5% to 7% of holdings in its roughly $560 million spot Bitcoin ETF. At Grayscale, 62% of gross Bitcoin creations and 63% of gross Ether creations were processed in-kind in June, up from 28% and 57% in March. The process allows investors to swap crypto for ETF shares without immediately triggering capital-gains taxes, and demand is growing amid concerns over kidnappings, hacks, and custody failures.

Morgan Stanley analyst Brian Nowak raised his estimates for Alphabet's in-house tensor processing unit chips, projecting the company could generate as much as $200 billion in revenue from TPUs over the next several years. The revision follows reports that Alphabet may supply about one million TPUs, representing roughly 1.3 gigawatts of capacity, for approximately $35 billion, implying pricing of about $27 billion per gigawatt. Nowak expects Google to sell about 0.3 gigawatts of TPU systems in the second half of 2026, followed by 3.2 gigawatts in 2027 and 4.2 gigawatts in 2028, which could produce $84 billion and $108 billion in related Google Cloud revenue in 2027 and 2028, respectively. The firm also pointed to Alphabet's expanded custom-chip work with Marvell, which may support higher TPU pricing and margins, and now assumes a 30% gross margin on TPU system sales, up from its previous 20% estimate.

Evercore ISI analyst Nicholas Amicucci maintains a Street-high $350 price target on Bloom Energy, implying roughly 71.5% upside from the stock's current $204.02 level. Bloom's Q2 FY2026 revenue surged 165.52% year over year to $1.065 billion, beating estimates by 28.82%, while non-GAAP EPS of $0.78 topped the $0.4066 consensus. Management raised full-year revenue guidance to $3.9 billion to $4.2 billion, about 100% growth at the midpoint. The stock has fallen about 42% from its 52-week high of $351.28, including a 12.12% drop in the past week, despite the strong results. Evercore's bull case rests on Bloom's speed-to-power advantage for data centers, expansion into rack manufacturing and semiconductor testing, and capital validation from Brookfield's expanded $25 billion financing shelf plus a separate $2.6 billion facility anchored by Oaktree, MUFG, and Morgan Stanley.

Morgan Stanley has raised its gold outlook, now seeing a path above $5,000 an ounce in 2027 after gold reached its prior fourth-quarter target of $4,450 faster than expected. Analyst Amy Gower wrote that the bank expects the Federal Reserve to hold rates steady through the remainder of 2026, with falling rate expectations, dollar weakness, and central-bank demand supporting the rally. Gold futures closed above $4,500 on Thursday, with August Comex gold rising 0.6% to $4,516.30 an ounce, while August silver futures climbed 3.5% to $68.026. Morgan Stanley said improving macro conditions are pulling more money into gold ETFs, and gold's resilience despite elevated long-term Treasury yields suggests investors are increasingly hedging against fiscal risks, heavy government debt, and potential currency devaluation. The bank cautioned that the path to $5,000 is unlikely to be straight, with a renewed inflation shock or stronger dollar posing risks.

JPMorgan's trading business delivered a standout second-quarter 2026 performance, with Markets revenues jumping 35% year over year. Equity Markets revenues surged 86% to $6 billion, while Fixed Income Markets revenues rose 6% to $6.1 billion. The strength helped Commercial & Investment Bank revenues rise 27% and the division generate a 22% return on equity. Management cautioned that the quarter benefited from a particularly favorable environment, suggesting growth may moderate. Peers Morgan Stanley and Goldman Sachs also posted strong trading results, with equity revenues up 69% and 72% respectively.

New York gold futures closed higher on Thursday after U.S. Treasury Secretary Scott Bessent said the Treasury buyback program could exceed the previously announced $4 billion, fueling investor hopes that long-term real interest rates will decline. COMEX gold futures for December delivery rose $26.10, or 0.57%, to settle at $4,571.40 per ounce. The U.S. Treasury will at least double the maximum size of buybacks for 10- to 20-year and 20- to 30-year bonds, from $2 billion to at least $4 billion, effective from September 9 through November 4. Analysts at Morgan Stanley said gold prices could surge past $5,000 per ounce by 2027 or possibly sooner.

Eagle Point Credit Management LLC is providing a roughly $1.3 billion private credit loan for a sprawling AI data center in Texas tied to Anthropic PBC. The debt is part of a larger $16 billion project-finance package for developer Nexus Data Centers, which will use the funds to complete construction of a 2,900-acre facility in Hubbard, Texas. The campus will have its own gas-fired power plant, and Anthropic will be the primary tenant. Eagle Point is the single largest investor in the loan, which is structured as mezzanine debt and sits below the safest parts of the overall financing. Banks including Morgan Stanley are leading the larger financing package, and the mezzanine portion recently closed.

Citi is preparing to add Bitcoin custody alongside traditional assets as the banking giant builds out its digital asset infrastructure. Announced on Tuesday, the service will be part of Custody+, a suite of custody and settlement tools, allowing clients to access traditional securities and crypto custody through the same framework. The announcement expands on plans Citi revealed in October to launch institutional Bitcoin custody in 2026. Citi said more than 80% of its asset-servicing event volume is now processed in real time, and its Citi Token Services platform allows clients to move tokenized deposits nearly instantly, 24 hours a day, across select markets. The move comes as major banks expand their digital asset businesses, with the New York Stock Exchange working with Citi and BNY on a planned blockchain-based platform supporting tokenized stocks and ETFs, and Morgan Stanley applying for a national trust bank charter for an entity that would offer crypto custody.

Anthropic's annualized revenue run rate topped $65 billion as of late July, a more than sevenfold jump since the close of 2025, according to Bloomberg. The Claude maker also disclosed preliminary second-quarter revenue exceeding $11.5 billion, up sharply from $787 million a year earlier, and reported positive adjusted operating income for the quarter. Anthropic has filed confidentially for an initial public offering and is working with Morgan Stanley, Goldman Sachs Group and JPMorgan Chase on the listing, according to CNBC, and could begin trading as early as this fall, ahead of OpenAI. The revenue figures support Anthropic's $965 billion valuation reached after a funding round in May, and on the basis of each company's most recently disclosed figures, Anthropic now leads OpenAI, whose run rate stood at $40 billion, according to Axios. The growth comes despite disruptions including a Pentagon supply-chain risk designation in June and a temporary takedown of two models over a government export control directive.

Morgan Stanley Preferred Series I declared a quarterly dividend of $0.4073 per share. The dividend is payable October 15 to shareholders of record on September 30, with the ex-dividend date also September 30.

Morgan Stanley says the artificial-intelligence boom is entering a more capital-intensive phase, raising a new question for investors in Microsoft, Alphabet, Amazon, Meta Platforms and the companies supplying their infrastructure: not whether AI spending will continue, but how increasingly enormous investment plans will be financed. The bank expects combined capital expenditures at the four hyperscalers to jump 57% in 2027 from 2026, as companies race to add data centers, computing capacity and power infrastructure. Morgan Stanley believes the economics can justify that spending, estimating AI investments can generate returns on invested capital above 25%, but the problem is timing. AI infrastructure requires cash upfront, while revenue and free cash flow arrive later, and Morgan Stanley's 2027 free-cash-flow estimates for the four hyperscalers have continued falling, creating what the bank sees as a widening financing gap. Credit markets are already reacting, with hyperscaler debt spreads widening roughly 35 basis points for higher-quality borrowers and about 50 basis points for lower-rated companies at their summer peak, though spreads have narrowed sharply over the past two weeks. Cash-rich hyperscalers and suppliers including Nvidia and Broadcom have considerably more financing flexibility, while companies further down the credit spectrum, including Oracle, data-center developers, REITs and former bitcoin miners, could become more sensitive to rising borrowing costs. The financing wave is also expanding beyond buildings, as Morgan Stanley expects private capital and asset-backed structures to increasingly fund servers, chips and energy infrastructure, pointing to Nvidia's compute-infrastructure financing platform and a $35 billion Broadcom-backed chip financing transaction.

Shein Global Holdings Ltd. is targeting a valuation of $26 billion to $27 billion in its Hong Kong initial public offering, a sharp drop from its peak value. The fast-fashion retailer will seek to raise about $2 billion in the IPO, with existing shareholders potentially taking up as much as half of the deal, according to people familiar with the matter. Shein is planning to list around the end of the month, though deliberations are ongoing and details may change. The company, founded in China and now headquartered in Singapore, was valued at about $100 billion in 2022 but has seen its valuation plummet amid slowing growth, tariffs, and competition from PDD Holdings' Temu. Goldman Sachs, Morgan Stanley, and JPMorgan Chase are arranging the IPO.

Morgan Stanley strategists led by Michael Wilson see U.S. corporate earnings momentum spreading beyond the largest technology companies, creating opportunities in quality stocks, artificial intelligence adopters, large-cap financials and consumer discretionary goods. Around 87% of S&P 500 companies have beaten earnings expectations this season, up from 82% in the previous quarter, while earnings revision breadth has recovered to 23% and 76% of industry groups are recording positive revisions. Median earnings growth for Russell 3000 companies has accelerated to 15%, its strongest rate since 2021, and median sales growth has reached approximately 8%, close to its best level since 2023. The bank notes investors are becoming more selective, rewarding companies that combine earnings growth with strong free cash flow and operating efficiency, and it remains overweight large-cap financials, particularly insurance and capital-markets businesses, while preferring hyperscalers over semiconductor stocks for a multi-month horizon. Morgan Stanley identifies higher long-term interest rates and oil prices as the principal near-term risks to its constructive outlook.

Morgan Stanley and JPMorgan increased their holdings of cryptocurrency ETFs in the second quarter, adding Bitcoin and Ethereum exposure despite market volatility. Morgan Stanley raised its position in BlackRock's iShares Bitcoin Trust ETF by 23% to about 16.5 million shares, though its reported value fell to roughly $549 million from $667 million as Bitcoin's price declined. The bank also grew its Ether ETF holdings sharply, increasing its stake in BlackRock's iShares Ethereum Trust ETF by about 202% to 4.6 million shares, and opened new positions in two Solana funds. JPMorgan lifted its IBIT holdings to about 10.4 million shares from 8.3 million, worth roughly $356 million at the end of June, and more than quadrupled its position in BlackRock's Ether ETF to about 1.17 million shares.

Anthropic investors expect the AI company to go public in October at a valuation of $2 trillion or more, which would make it the largest initial public offering in history, according to the Financial Times. Half a dozen of Anthropic's backers said the Claude maker's annualized revenue is expected to land between $100 billion and $120 billion before the year closes, more than tenfold growth compared with the $47 billion annualized revenue reported in May. The company last raised capital at a $965 billion post-money valuation, and senior executives had not fixed a valuation target even in private conversations. Anthropic filed paperwork with the Securities and Exchange Commission in June and entered a quiet period, with Morgan Stanley, Goldman Sachs, and JPMorgan leading the offering. Challenges include a top model priced more than 2.5 times higher than OpenAI's flagship, a temporary export control that slowed revenue growth in June, active litigation against the U.S. Department of Defense, and customers shifting toward lower-cost AI options.

Silence Therapeutics announced a proposed public offering of American Depositary Shares aiming to raise $150 million. Each ADS represents £0.05 of the company's capital. Underwriters will have a 30-day option to purchase an additional 15% of the ADSs at the offering price. Jefferies, Morgan Stanley, Cantor and William Blair are joint book-running managers for the deal.

Riot Platforms reported a strategic pivot toward AI data centers, securing a landmark 191-megawatt lease with a leading frontier AI lab expected to generate approximately $9.1 billion in total contract revenue over 20 years, with potential to reach $16.1 billion including extension options. The company also delivered an initial 25 megawatts to AMD on time and on budget, and AMD exercised its expansion option to increase contracted capacity to 50 megawatts. Total revenue rose 14% year-over-year to $174 million, but a GAAP net loss of $237 million was driven by over $240 million in non-cash items including a $75 million mark-to-market loss on Bitcoin holdings and $98 million in depreciation and amortization. Bitcoin mining revenue declined to $113.7 million, with hash rate utilization averaging 87% and a direct cost to mine of $49,912 per Bitcoin. Riot ended the quarter with $1.2 billion in total liquidity, consisting of $666 million in Bitcoin and $549 million in cash, and secured a $573 million interim financing facility from Morgan Stanley to fund initial development costs.

Morgan Stanley announced the launch of the U.S. Innovation Infrastructure Initiative, intending to facilitate approximately $1.5 trillion of capital raising, financing, advisory and related investment activity over the next 10 years. The firmwide initiative focuses on clients building and scaling companies, technologies and infrastructure central to long-term U.S. competitiveness and national security. It will concentrate on three areas: innovation platforms and strategic industries such as artificial intelligence and semiconductors, infrastructure for the innovation economy including digital and energy systems, and capital for builders and growth companies. Co-President Dan Simkowitz said the effort brings together the firm's advisory, capital markets, wealth management and investment management capabilities to support clients across key stages of growth.

Lambda Inc., an AI cloud-computing provider backed by Nvidia, is selling a $917 million leveraged loan to finance the purchase and installation of GPUs and other infrastructure as part of a contract with Nvidia. The debt, being pitched at an interest rate of up to 3.75 percentage points over the benchmark rate and a discounted price of 99 cents on the dollar, has a relatively short maturity of 4.4 years and is fully amortizing, meaning it will be repaid over roughly four years. Order books have reached nearly $2 billion after pre-marketing, and commitments are due Thursday, with Morgan Stanley leading the transaction. The loan follows a novel financing by CoreWeave earlier this year, which was the first of its kind to finance chips in the institutional leveraged loan market.

Anthropic has secured $71 billion in chip-lease debt through special purpose vehicles in roughly 60 days, keeping the obligations off its corporate balance sheet. The structure relies on a Broadcom residual value backstop that effectively lends Broadcom's investment-grade credit rating to senior tranches, including approximately $6 billion in Senior A1 notes and approximately $24 billion in Senior A2 notes from a $35 billion deal closed in June 2026 arranged by Apollo Global Management and Blackstone Credit and Insurance. A $4.5 billion Class B tranche without the backstop trades at roughly 8.5 percent, highlighting the value of the credit enhancement. A preliminary $36 billion second deal led by Blackstone is in early investor talks, targeting data centers in New York, Texas, Louisiana, and Indiana, and if finalized would push total structured-credit exposure to Google hardware above $71 billion. The financing is separate from Anthropic's planned October 2026 IPO, which targets a valuation anchored at the $965 billion post-money from its $65 billion Series H raise, with Morgan Stanley, Goldman Sachs, and JPMorgan leading the underwriting.

A consortium of banks led by Morgan Stanley is preparing to offload about $15 billion of debt tied to a Google-backed data center leased to AI startup Anthropic, the Financial Times reported. The financing is linked to a 2,000-acre data center campus in Hubbard, Texas, being developed by Nexus Data Centers, which will house Google’s TPUs and be leased by Anthropic under a long-term agreement backed by Google. The refinancing would allow banks to move the debt off their balance sheets, reducing exposure to AI infrastructure financing and creating capacity for additional lending. The $15 billion financing is expected to be refinanced through multiple bond offerings as Nexus Data Centers draws down the loan in stages after meeting construction milestones, with a portion possibly refinanced in the leveraged loan market. The bonds are expected to receive speculative-grade ratings despite Google’s backstop, as its guarantees take effect only after the data center is completed, leaving investors exposed to construction and cost-overrun risks.

Rio Tinto’s planned sale of infrastructure assets is attracting interest from major private equity firms including Blackstone, Apollo Global Management, KKR, and Stonepeak, according to The Australian. The deal is expected to total between $2 billion and $3 billion, with Morgan Stanley managing the sale process. The assets span infrastructure holdings in Canada and the Pilbara region of Western Australia, though the final shape of the transaction remains fluid. Regulatory scrutiny in Australia could pose a hurdle for offshore buyers, potentially making the Canadian assets the first to be sold.

Morgan Stanley projects aggregate cloud capital spending will reach $1.4 trillion in 2027, about 17% above the consensus estimate of roughly $1.2 trillion. The firm notes that consensus estimates have already risen by about $170 billion, or 30%, since before second-quarter earnings. Three of the four U.S. hyperscalers raised their 2026 guidance: Alphabet moved its range to $195 billion to $205 billion, Amazon lifted cash capex to about $220 billion, and Meta narrowed its range to $130 billion to $145 billion, while Microsoft held at roughly $190 billion. All four remain supply constrained as external cloud demand and internal AI workloads outpace available capacity, yet revenue accelerated with Azure growing 43%, Google Cloud 82%, and AWS 37%, its fastest in 18 quarters. Morgan Stanley called consensus 2027 growth of 29% too conservative, arguing it implies non-AI cloud capex growing just 7%, and said hyperscalers sounded more confident on 2026 and 2027 returns citing rising backlogs, multi-year commitments, and pricing power.

Morgan Stanley has increased its annualized dividend to $4.60 per share, a 19.5% rise from last year, giving the stock a dividend yield of 2.19%. The company's payout ratio stands at 32% of trailing twelve-month earnings, and it has raised its dividend four times over the past five years for an average annual increase of 22.85%. The Zacks Consensus Estimate for fiscal 2026 earnings is $12.79 per share, representing expected growth of 25.27% from the prior year. The stock carries a Zacks Rank of 2, or Buy.

Morgan Stanley strategist Michael Wilson said momentum-style equity investing is poised to rebound as sectors with strong earnings replace chip stocks in leading market gains. After one of the worst momentum selloffs in history, Wilson noted the style is rotating toward quality shares with stable earnings, with insurance and healthcare equipment and services stocks increasingly in favor. A Goldman Sachs momentum basket has fallen 35% from its June peak but is up 9.4% year-to-date, in line with the S&P 500. Second-quarter earnings per share growth is running at 29% year-on-year, with S&P 500 companies beating expectations at an 86% rate, the highest in five years. Wilson expects the S&P 500 to reach 8,000 points by year-end, supported by the benchmark’s greater weighting in high-quality stocks and improving breadth in earnings revisions. Goldman’s Ben Snider said the AI trade’s recent consolidation is typical of past momentum rallies, while JPMorgan’s Mislav Matejka expects a continued broadening of market strength and stabilization in semiconductor stocks, with strong earnings remaining a support for equities.

SpaceX’s June IPO generated about $100 million in fees for Morgan Stanley bankers, while the broader listing sent more than $74 billion to the bank’s wealth arm. Ten banks ran the deal, led by Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup and J.P. Morgan, but Morgan Stanley’s Workplace unit captured a large share of new assets because it already administered SpaceX employee stock plans. The bank’s wealth division took in $148.1 billion of new client money last quarter, with just over half coming from IPOs of stock plan clients. SpaceX shares closed at $108.37 on July 31, which is 20% below the $135 offer price and 33% below its $161 first-day close, ahead of the company’s first post-IPO earnings report on August 4.

The United States and Japan have jointly intervened to support the yen after it fell to a 40-year low against the dollar. The US Treasury instructed the Federal Reserve Bank of New York to sell euros and buy yen on Friday, with Goldman Sachs and Morgan Stanley executing the purchases. The intervention, the first US involvement in Japan's currency since 2011, may have totaled around ¥8.45tn, equivalent to £40bn. Treasury Secretary Scott Bessent's to-do list noted 'Buy Japanese Yen (JPY) $5-10 bil,' and he praised Japanese leaders for their commitment to monetary stability. The move lifted the yen to a three-month high, with the dollar falling from 164 yen to 157 yen by the end of last week.

Morgan Stanley announced two new exchange-traded funds for Ethereum and Solana on July 28, each carrying a 0.14% expense ratio. The ETFs integrate staking, with 95% of staking rewards expected to pass through to shareholders, while staking providers retain 5% and Morgan Stanley takes no cut. The firm’s more than 16,000 financial advisors can now offer these products to clients, potentially broadening access to the two cryptocurrencies. The launch follows Morgan Stanley’s April introduction of its Bitcoin Trust, which also charged 0.14%, undercutting the 0.20% to 0.25% typical of most Bitcoin ETFs.

Amazon stock closed the July 31 trading session up 15.32% at $271.58, soaring after its second quarter 2026 earnings report. Morgan Stanley analyst Brian Nowak raised the price target to $335 from $330, maintaining an overweight rating, citing AWS growth acceleration to 36.8% year over year and a $496 billion backlog that beat expectations by about $20 billion. However, the bullish thesis ignores that AWS growth is largely driven by unprofitable AI startups Anthropic and OpenAI, both heavily funded by Amazon, and that Amazon’s Q2 net income of $62.6 billion included a $53.4 billion non-operating gain from its Anthropic investment. The analysis also overlooks the potential entry of Meta into the cloud infrastructure market, which could spark a price war, and the difficulty of monetizing private AI valuations, as evidenced by SoftBank’s stalled efforts to secure a loan using OpenAI shares as collateral.

The United States bought yen jointly with Japan to support the currency after the yen weakened near its lowest level in almost 40 years. The Federal Reserve Bank of New York sold euros and bought yen on behalf of the US Treasury, with Goldman Sachs Group and Morgan Stanley executing the transactions. Earlier, the US Treasury had notified several banks to prepare for yen market intervention on Friday, July 31, including possible further actions in the future. The news caused the yen to strengthen against the US dollar during Friday trading. This move follows Japan's own intervention on Thursday, with Bank of Japan data indicating that Japan may have sold as much as 58.97 billion US dollars to buy yen and slow its decline. This joint effort marks a significant escalation in attempts to prop up the yen, after its depreciation raised Japan's import costs and exacerbated inflationary pressures. However, a stronger yen could pressure Japan's export sector, as overseas earnings translate into lower yen-denominated revenue.