News about Morgan Stanley

Morgan Stanley believes the AI trade will broaden from chipmakers and infrastructure to software firms and businesses that use AI to cut costs. Amazon (AMZN) is using AI and robotics to improve retail efficiency, and its trailing-12-month operating margin rose more than 3 percentage points over two years to 12.1%; Morgan Stanley expects it to reach 17% by 2028. Datadog (DDOG) reported second-quarter revenue up 36% to $1.1 billion and non-GAAP earnings up 41% to $0.65 per diluted share, and raised its full-year revenue growth guidance to 30%. However, with the stock at 104 times adjusted earnings, the author considers its valuation rich and Datadog a risky investment.

The 5th GMIF Innovation Summit (GMIF2026) concluded in Shenzhen, co-hosted by the Shenzhen Memory Industry Association (SMIA) and the School of Integrated Circuits at Peking University, under the theme 'The Future Built on AI Memory and Storage.' As AI shifts from training to large-scale inference, tokens are becoming a unit of value, making memory and storage bandwidth, capacity and energy efficiency key to system performance and cost. Morgan Stanley's Daniel Yen projected that more than half of cloud data center capex will go to memory and storage (excluding HBM) by 2027, and identified six paths to overcome the 'memory wall.' Speakers from Peking University, Samsung, Sandisk, Solidigm, Arm and Silicon Motion said HBM remains central to high-end AI but is constrained by yield, cost and thermal limits, pointing to NAND-based high-bandwidth options, tiered storage and liquid cooling. The summit also highlighted that value-chain collaboration is becoming a deeper partnership built around workload requirements and joint scenario validation.

The author highlights Morgan Stanley as a dividend growth stock, with a recent yield of 2.5% and a total annual payout of $4.60 per share, up from $1.10 in 2018 and $2.95 in 2022. This year's quarterly dividend rose 15%, from $1 to $1.15, and share buybacks lift the total yield to about 4.8%. The firm has been expanding beyond investment banking into wealth and investment management; in the third quarter, revenue rose 11% to $20.3 billion, wealth management contributed $9 billion, and EPS grew 8%. The company repurchased $1.5 billion of stock in the quarter under a $20 billion authorization. The author suggests investors seeking growing dividend income take a closer look.