S&P Global (SPGI) posted underwhelming Q4 results amid intensifying investor scrutiny around AI disruption potential that resulted in a harsh reaction, Morgan Stanley said in a Tuesday research note.

Lighter-than-expected market intelligence revenue growth in Q4 was due to a decline in volatile transactional revenue, according to the note.

The core business remains solid, and the selloff is overdone, the firm said, adding that it retained its long-term view of the company as "best-in-class" with high-quality assets and limited AI disruption risk.

Morgan Stanley reiterated its overweight rating on the stock and adjusted its price target to $580 per share from $627.

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