Morgan Stanley has concepts for the best way to play telecommunications and networking tools shares getting into 2025. While the broader group outperformed the market, there was nonetheless bifurcation, in keeping with fairness analysts led by Meta Marshall. Specifically, Marshall wrote in a analysis report out final week that shares seen as enablers of synthetic intelligence noticed notably bigger positive aspects this yr. For 2025, Marshall stated these corporations poised to take market share within the AI house and tied to enterprise work ought to see outsized positive aspects. On the opposite hand, the analyst stated she was extra cautious on service suppliers, provided that Wall Street has already priced in a enterprise restoration to their inventory outlooks. Given this backdrop, listed here are her favourite names within the sector heading into 2025: Marshall highlighted Nutanix as her prime choose into the brand new yr. She famous the corporate is tied to enterprise enterprise tendencies, which affords motive for optimism. “Enterprise presents the most important alternative for outperformance in our view,” Marshall informed shoppers within the 94-page report. “Valuations are nonetheless cheap and there are alternatives for optimistic estimate revisions.” In addition to benefiting from elevated enterprise spending, she stated Nutanix can take market share from VMware, a unit of Dell Technologies . Marshall raised her worth goal on Nutanix by $7 to $85, implying 32% upside over Tuesday’s shut. She’s within the majority on Wall Street, the place most analysts charge Nutanix the equal of purchase, in keeping with LSEG. NTNX YTD mountain Nutanix in 2024. Shares have climbed greater than 24% in 2024, extending final yr’s rally of 83%. Arista Networks , in the meantime, can be an AI play within the sector that is gaining market share, Marshall stated. Marshall’s advice comes amid a powerful yr for Arista. The inventory has virtually doubled, climbing some 95% in 2024, roughly equal to what it gained in 2024. Marshall hiked her worth goal to $118 from $102.50, placing her about $10 above analysts’ consensus 12-month goal. Still, after the massive runs seen over the previous two years, that solely displays potential upside of about 3% over Tuesday’s shut. ANET YTD mountain Arista Networks in 2024.
