Key Takeaways:
Morgan Stanley identified GE Vernova, Lam Research and United Airlines as top picks ahead of Q2 earnings, citing upside from guidance raises and contract momentum across energy, travel and semiconductors.
"Capex is broadening beyond data centers and reshoring progress suggests the US industrial economy may be entering a sustained growth cycle," Michael Wilson, analyst at Morgan Stanley, said.
GE Vernova reports July 22. The stock has gained 61% this year and trades near $1,067, with a $163 billion backlog and 71% organic order growth. Management expects to sell out gas turbine reservations through 2030 and raised 2026 guidance to as much as $45.5 billion in revenue and $7.5 billion in free cash flow. United Airlines reports July 16. The stock is up 43% from its 2026 low as travel demand absorbed seven consecutive price increases without breaking. Analysts from Susquehanna, Cowen, Goldman Sachs, BMO and Bernstein raised their targets this month. Lam Research reports July 29. Shares have more than doubled this year to $346 but sit 20% below a June record of $437. Stifel raised its target to $425 from $325, while Needham boosted its target to $390.
For GE Vernova, the key catalyst is whether earnings validate the capex cycle beyond AI data centers. The company repurchased $1.3 billion in stock at an average price of $720, well below the current $1,067. For United Airlines, the test is whether pricing power holds if oil prices rise again after the US-Iran ceasefire broke down. For Lam Research, the question is whether a forward P/E of 62 can be sustained as equipment orders improve.
The three picks span energy, travel and semiconductors, reflecting Morgan Stanley's view that Q2 earnings will reward companies with pricing power and backlog visibility. Investors will watch GE Vernova's July 22 print, United Airlines' guidance call and Lam Research's July 29 report for confirmation.
This article is for informational purposes only and does not constitute investment advice.
