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 StanleyMorgan Stanley's strategists express a constructive outlook on U.S. equities, highlighting broadening earnings growth and specific sector preferences, which reflects positively on the firm's investment banking and asset management prospects.
