MW Morgan Stanley just poured through 3,600 stocks and says these are the best opportunities from the AI shakeout

By Barbara Kollmeyer

Show me the return on equity is the new rule, say analysts.

Morgan Stanley sifted through opportunities after the AI shakeout.

The jobs report may overshadow the market's recent preoccupation on just how much artificial intelligence will damage the growth prospects for software and other industries. But the AI concerns are likely to come quickly back to the surface.

Morgan Stanley strategists just published a fifth version of what they call global AI stock mapping, sifting through 3,600 names in search of trends and opportunities. One central observation they make: market focus has shifted from pure AI exposure to proof of return on investment (ROI), and they say "the fundamental gap between winners and losers is widening."

The strategists added that companies are starting to flag their proof of ROI, with 30% of North America AI adopters identified by analysts citing "at least one quantifiable AI impact" in the final quarter of 2025, a steady gain over the past year.

Investors looking for signs companies are delivering that ROI proof should be looking at whether companies report margin expansion, says a team led by analyst Stephen Byrd. The strategists expect around 80% of AI benefits to come from cost efficiency versus revenue growth.

The profit margin for companies they call AI adopters was twice that of global stocks, over the last two years, but the market hasn't given them that credit in forward estimates.

A screen of companies benefiting from AI include Samsung Electronics (KR:005930), SK Hynix (KR:000660), Airbus (FR:AIR), Nokia $(NOK)$, Visa (V), Mastercard $(MA)$, Coca-Cola $(KO)$ and CVS Health $(CVS)$, they say.

What else should investors be looking out for to spot the winners? Morgan Stanley offers up three more criteria for investors to assess.

The first is whether companies that lay off workers clearly explain why the moves are necessary.

Secondly, as markets clearly start to punish business models where AI is posing a structural threat, company leaders must demonstrate how the technology is "economically meaningful to the business." Finally, corporates should be articulating how AI is "embedded in strategy, influencing core financial drivers and delivering measurable ROI."

The analysts see a median 62% upside to their price targets for their list of mispriced stocks after a "broad and largely indiscriminate" sell-off.

Morgan Stanley included a screen of companies - mostly software and services - they say were unfairly sold off in a recent move that was "broad and largely indiscriminate, with limited differentiation across business models or fundamentals." Across those beaten-down stocks, they see a median 62% upside for their price targets, and triple-digit potential for CCC Intelligent Solutions $(CCC)$, Vertex (VERX), Salesforce (CRM) and ServiceTitan (TTAN).

Outside the U.S., Australian-listed Xero (AU:XRO) and WiseTech (AU:WTC) offer the most upside, they say.

The markets

Stock futures (ES00) (YM00) (NQ00) are inching up ahead of crucial jobs data. Gold (GC00) and silver (SI00) are rallying, the dollar DXY and bitcoin (BTCUSD) are down. Oil (CL00) is also higher.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              6941.81    0.35%   -0.31%  1.41%   14.39% 
   Nasdaq Composite                                                     23,102.47  -0.66%  -2.56%  -0.60%  17.61% 
   10-year Treasury                                                     4.148      -13.20  1.20    -2.40   -48.10 
   Gold                                                                 5075.2     2.11%   10.46%  17.15%  73.42% 
   Oil                                                                  64.39      0.77%   5.38%   12.16%  -12.02% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

January nonfarm payrolls are due at 8:30 a.m., with economists forecasting gains of 55,000 and an unchanged 4.4% unemployment rate.

Mattel $(MAT)$ is slumping after the toymaker's sluggish holiday quarter.

Lyft $(LYFT)$ is sinking as a $1 billion buyback couldn't overcome mixed results and forecasts.

Robinhood stock (HOOD) is dropping as a cautious crypto trading weighed on sales, though the CEO is touting a prediction-market supercycle.

Cloudflare (NET) narrowed losses, and said AI was driving demand, with shares surging.

Ford shares $(F)$ are rising after a mixed report, but upbeat year-ahead outlook.

Moderna (MRNA) said the FDA won't review its new flu vaccine, and shares are down.

AppLovin (APP), Cisco $(CSCO)$ and McDonald's $(MCD)$ will report after the close.

Activist investor Ancora has reportedly built a $200 million stake in Warner Bros. Discovery $(WBD)$ and plans to push to reject a deal with Netflix $(NFLX)$.

Best of the web

FAA closes airspace around El Paso, Texas, for 10 days, grounding all flights.

These white-collar workers ditched their careers for jobs they hope AI can't replace.

Blackstone joins Anthropic round, raising stake to $1 billion.

The chart

Some breathing room for tech investors? The chart from Truist Wealth shows tech stock valuations, measured by forward price-to-earnings ratios, have dropped to 24.7 times from 32 times in October. "After significant outperformance, we view the recent pullback in technology as a reset in expectations rather than a breakdown," said a team led by chief investment officer Keith Lerner. "Valuations have compressed meaningfully, down more than 20% from their peak, while earnings momentum remains the strongest among sectors."

Top tickers

These were the top-searched tickers on MarketWatch as of 6 a.m.:

   Ticker  Security name 
   TSLA    Tesla 
   NVDA    Nvidia 
   GME     GameStop 
   TSM     Taiwan Semiconductor Manufacturing 
   PLTR    Palantir 
   AMZN    Amazon 
   MSFT    Microsoft 
   QNCX    Quince Therapeutics 
   MU      Micron 
   AMD     Advanced Micro Devices 

Random reads

The United Strand: One fan's hairy battle for a ManU win.

Win it from your couch: Hershey's edible gold medals.

Gory giveaway: A replica bloodstained jersey from a baseball great.

BEYOND THE NEWSROOM

MarketWatch Picks: I'm retired with $1M and no debt. My objective is income. An adviser wants 1.25%, but is it worth it?

-Barbara Kollmeyer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 11, 2026 07:12 ET (12:12 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.