As the earnings season winds down, analysts at Morgan Stanley are spotlighting a range of overweight-rated stocks ripe for purchase, including recognizable names like Nvidia. Additionally, the firm has expressed confidence in stocks such as EQT, Arista Networks, and Tuya, particularly as these companies prepare to release their quarterly reports.
Meta Marshall, an analyst focusing on Arista Networks, remains optimistic about the networking company’s stock ahead of its earnings announcement this Tuesday. She notes, “Over the past few years, the company has consistently surpassed revenue expectations by approximately 300–400 basis points, which aligns closely with buyside anticipations this quarter.” However, Marshall does caution that the upcoming fourth-quarter results might not bring about significant shifts. “Further expansion in multiples is contingent on the company attracting a substantial influx of new clients,” she adds, pointing out that Arista has an overlooked opportunity within the data center arena. Marshall shares, “Our assessments indicated a more positive view of networking this quarter, with data centers being a focal point and a gradual improvement anticipated throughout the year.” Arista’s stock has impressively increased by 61% over the past year.
Turning to EQT, analyst Devin McDermott advises capitalizing on any downturns in shares of this hydrocarbon exploration entity, noting, “The recent dip presents a favorable opportunity to enter the market as valuations are more enticing now.” Heading into Wednesday’s earnings, EQT remains a firm favorite at Morgan Stanley. Over the last year, the stock has surged over 60% and boasts a 16% rise year to date. According to McDermott, recent fluctuations in the stock are driven by apprehensions surrounding DeepSeek’s AI model, potentially impacting power demand. While acknowledging the persistence of these concerns, McDermott still views it as a buying opportunity, stating, “While there’s potential for longer-term gas demand due to increasing power consumption, LNG (liquified natural gas) presents a more immediate growth driver.” He reiterates the preference for gas over oil within the exploration and production sector, recommending purchases during the gas pullback.
In regard to Tuya, the China-based Internet of Things and AI company has seen a remarkable 66% increase in its share prices this year alone. Morgan Stanley, however, believes there’s further potential for growth. The firm recently reaffirmed its overweight rating, highlighting “strong revenue growth momentum” expected to persist. Analyst Yang Liu observes, “There’s a notable disconnect between the company’s fundamentals and its current share price,” advising investors to stay composed. She continues, “We anticipate significant room for the share price to align with its inherent value.” Despite acknowledging some tariff risks, the firm sees various positive factors that shouldn’t be overlooked right now. Liu has raised her price target from $2.30 to $3 as Tuya gears up for its fourth-quarter earnings on February 26, coinciding with Nvidia’s results. “Robust top-line growth is anticipated, bolstered by strong overseas IoT demand and Tuya’s expanding market share,” Liu notes in her quarterly preview.
Regarding Nvidia, while some concerns linger about potential long-term risks, the near-term business outlook remains solid. Increased supply visibility from Blackwell and an obvious customer willingness to invest underscore the positive sentiment. Morgan Stanley believes Nvidia deserves to trade at a premium given the likelihood of upward revisions in its prospects in the immediate future.
