Morgan Stanley Sees Opportunity in Microsoft and Salesforce Amid AI Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy MS?
Source: CNBC
- Market Recovery Signs: Following last week's selloff in enterprise software stocks, Microsoft and Salesforce saw consecutive gains on Monday, indicating a potential recovery in market sentiment as investors look for attractive buying opportunities.
- Price Decline Analysis: Microsoft shares have dropped 17% over the past three months, while Salesforce has declined nearly 20%, reflecting investor concerns about the impact of AI advancements potentially enabling businesses to develop software independently.
- Profit Model Transition: Morgan Stanley believes that while AI may enhance productivity and affect seat license demand, it does not pose an existential risk but rather an execution risk related to business model transitions, emphasizing the strong positioning of Microsoft and Salesforce in IT spending plans.
- Divergent Investment Ratings: While Morgan Stanley maintains a bullish outlook on Microsoft with a “buy” rating, it takes a more cautious stance on Salesforce, suggesting it should not be bought at this time, reflecting uncertainty regarding future profitability.
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Analyst Views on MS
Wall Street analysts forecast MS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MS is 185.00 USD with a low forecast of 132.00 USD and a high forecast of 219.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
7 Buy
7 Hold
0 Sell
Moderate Buy
Current: 179.960
Low
132.00
Averages
185.00
High
219.00
Current: 179.960
Low
132.00
Averages
185.00
High
219.00
About MS
Morgan Stanley is a global financial services company. The Company is engaged in providing a range of investment banking, securities, wealth management and investment management services. Its segments include Institutional Securities, Wealth Management and Investment Management. Its Institutional Securities segment provides a variety of products and services to corporations, governments, financial institutions and ultra-high net worth clients. Its Wealth Management segment provides an array of financial services and solutions to individual investors and small to medium-sized businesses and institutions. Its Investment Management segment provides a range of investment strategies and products that span geographies, asset classes, and public and private markets to a diverse group of clients across institutional and intermediary channels. Its investment banking services consist of capital raising and financial advisory services, including the underwriting of debt and other products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Morgan Stanley Sees Opportunity in Microsoft and Salesforce Amid AI Concerns
- Market Recovery Signs: Following last week's selloff in enterprise software stocks, Microsoft and Salesforce saw consecutive gains on Monday, indicating a potential recovery in market sentiment as investors look for attractive buying opportunities.
- Price Decline Analysis: Microsoft shares have dropped 17% over the past three months, while Salesforce has declined nearly 20%, reflecting investor concerns about the impact of AI advancements potentially enabling businesses to develop software independently.
- Profit Model Transition: Morgan Stanley believes that while AI may enhance productivity and affect seat license demand, it does not pose an existential risk but rather an execution risk related to business model transitions, emphasizing the strong positioning of Microsoft and Salesforce in IT spending plans.
- Divergent Investment Ratings: While Morgan Stanley maintains a bullish outlook on Microsoft with a “buy” rating, it takes a more cautious stance on Salesforce, suggesting it should not be bought at this time, reflecting uncertainty regarding future profitability.
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- Announcement Source: The information regarding Grimes' return has been reported by Reuters.
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Michael Grimes' Return: Michael Grimes is returning to Morgan Stanley after his tenure in the Trump administration.
Impact on Morgan Stanley: His return is expected to influence the firm's strategy and operations, particularly in areas affected by his experience in government.
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Funding Sources: The funding sources mentioned include Glade Brook Capital, Growth Equity at Goldman Sachs, and Morgan Stanley.
Involved Companies: Key companies involved in the funding landscape are Microsoft and Morgan Stanley, indicating a diverse range of financial backing.
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Chipotle Plans Continued Price Increases Targeting High-Income Customers
- High-Income User Insight: Chipotle CEO Scott Boatwright revealed in a recording that 60% of core users earn over $100,000 annually, providing the company with confidence to target this demographic more effectively, potentially enhancing brand loyalty and sales.
- Earnings Beat Expectations: In its Q4 2025 report, Chipotle posted adjusted earnings per share of $0.25, exceeding the $0.24 consensus, with revenue of $2.98 billion surpassing the $2.96 billion estimate, demonstrating resilience in profitability despite operational challenges.
- Sales Decline: Despite the strong earnings report, comparable restaurant sales fell 2.5% year-over-year, primarily due to a 3.2% decrease in transactions, indicating challenges in customer traffic that could impact future growth potential.
- Market Performance Analysis: Chipotle has a market capitalization of $219.53 billion, with a 52-week high of $124.17 and a low of $55.51, while the current Relative Strength Index (RSI) stands at 53.13, suggesting the stock is in a long-term consolidation phase with short-term upward momentum.
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UiPath Attracts Institutional Investor Interest
- Institutional Investment Surge: Vanguard Group added 1.2 million shares in December, a 2.5% increase; BlackRock raised its stake by 6.9% as of September 30, 2025, while Bank of America and Morgan Stanley increased their positions by 9.8% and 11.21%, respectively, indicating strong institutional confidence in UiPath.
- Significant Revenue Growth: In Q3 of fiscal 2026, UiPath reported revenue of $411 million, a 16% year-over-year increase, with annual recurring revenue (ARR) hitting $1.78 billion, up 11%, showcasing robust performance in the SaaS sector.
- Expanding Customer Base: The number of customers with ARR over $100,000 grew by 12% to 2,506, while those exceeding $1 million increased by 10% to 333, reflecting UiPath's appeal and market penetration among high-value clients.
- Strong Cash Flow and Debt Position: The company saw free cash flow rise by 8.2% to $25.11 million, with a net cash position of $744.1 million and total debt of only $82 million, indicating solid financial health despite not yet achieving net profitability, suggesting strong future growth potential.
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Morgan Stanley Sees Opportunity in Microsoft and Salesforce Amid AI Concerns
- Market Recovery Signs: Following last week's selloff in enterprise software stocks, Microsoft and Salesforce saw consecutive gains on Monday, indicating a potential recovery in market sentiment as investors look for attractive buying opportunities.
- Price Decline Analysis: Microsoft shares have dropped 17% over the past three months, while Salesforce has declined nearly 20%, reflecting investor concerns about the impact of AI advancements potentially enabling businesses to develop software independently.
- Profit Model Transition: Morgan Stanley believes that while AI may enhance productivity and affect seat license demand, it does not pose an existential risk but rather an execution risk related to business model transitions, emphasizing the strong positioning of Microsoft and Salesforce in IT spending plans.
- Divergent Investment Ratings: While Morgan Stanley maintains a bullish outlook on Microsoft with a “buy” rating, it takes a more cautious stance on Salesforce, suggesting it should not be bought at this time, reflecting uncertainty regarding future profitability.
See More
MICHAEL GRIMES TO REJOIN MORGAN STANLEY AS CHAIRMAN OF INVESTMENT BANKING, ACCORDING TO MEMO OBTAINED BY REUTERS
- Michael Grimes' Return: Michael Grimes will return to Morgan Stanley as the Chairman of Investment Banking.
- Announcement Source: The information regarding Grimes' return has been reported by Reuters.
See More
MICHAEL GRIMES REJOINS MORGAN STANLEY FOLLOWING TIME IN TRUMP ADMINISTRATION - FT
Michael Grimes' Return: Michael Grimes is returning to Morgan Stanley after his tenure in the Trump administration.
Impact on Morgan Stanley: His return is expected to influence the firm's strategy and operations, particularly in areas affected by his experience in government.
See More
DATABRICKS: FUNDING ROUND FEATURED GLADE BROOK CAPITAL, GOLDMAN SACHS GROWTH EQUITY, MICROSOFT, AND MORGAN STANLEY
Funding Sources: The funding sources mentioned include Glade Brook Capital, Growth Equity at Goldman Sachs, and Morgan Stanley.
Involved Companies: Key companies involved in the funding landscape are Microsoft and Morgan Stanley, indicating a diverse range of financial backing.
See More
Chipotle Plans Continued Price Increases Targeting High-Income Customers
- High-Income User Insight: Chipotle CEO Scott Boatwright revealed in a recording that 60% of core users earn over $100,000 annually, providing the company with confidence to target this demographic more effectively, potentially enhancing brand loyalty and sales.
- Earnings Beat Expectations: In its Q4 2025 report, Chipotle posted adjusted earnings per share of $0.25, exceeding the $0.24 consensus, with revenue of $2.98 billion surpassing the $2.96 billion estimate, demonstrating resilience in profitability despite operational challenges.
- Sales Decline: Despite the strong earnings report, comparable restaurant sales fell 2.5% year-over-year, primarily due to a 3.2% decrease in transactions, indicating challenges in customer traffic that could impact future growth potential.
- Market Performance Analysis: Chipotle has a market capitalization of $219.53 billion, with a 52-week high of $124.17 and a low of $55.51, while the current Relative Strength Index (RSI) stands at 53.13, suggesting the stock is in a long-term consolidation phase with short-term upward momentum.
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UiPath Attracts Institutional Investor Interest
- Institutional Investment Surge: Vanguard Group added 1.2 million shares in December, a 2.5% increase; BlackRock raised its stake by 6.9% as of September 30, 2025, while Bank of America and Morgan Stanley increased their positions by 9.8% and 11.21%, respectively, indicating strong institutional confidence in UiPath.
- Significant Revenue Growth: In Q3 of fiscal 2026, UiPath reported revenue of $411 million, a 16% year-over-year increase, with annual recurring revenue (ARR) hitting $1.78 billion, up 11%, showcasing robust performance in the SaaS sector.
- Expanding Customer Base: The number of customers with ARR over $100,000 grew by 12% to 2,506, while those exceeding $1 million increased by 10% to 333, reflecting UiPath's appeal and market penetration among high-value clients.
- Strong Cash Flow and Debt Position: The company saw free cash flow rise by 8.2% to $25.11 million, with a net cash position of $744.1 million and total debt of only $82 million, indicating solid financial health despite not yet achieving net profitability, suggesting strong future growth potential.
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