Morgan Stanley says buy these five stocks soon that are set to rally

CNBC

2 days ago

There's a slew of stocks that have a lot more room to run, according to Morgan Stanley. The firm says overweight-rated companies like Nvidia have plenty of upside and remain top picks in June. Others include: Nubank , Sallie Mae , Seagate and Coupang. Seagate The tech data storage company is just too attractive to ignore, analyst Erik Woodring, wrote following Seagate's analyst day in late May. "The inflection in compute will drive exponential growth in storage demand, and we see STX as a still underappreciated play on this theme at just 7.5x our peak EPS," he wrote. And there's a whole host of more positive catalysts to come for top pick Seagate, too, the firm said. "Tech leadership, premium margins, robust FCF generation, and strong cap returns support EPS upside and multiple re-rating from here," he added. The stock is also an undervalued play in the data center space, too, Woodring says. Shares of Seagate are up 36% this year. Coupang The South Korea e-commerce company was recently named a new top pick at the firm. "Competitors have scrambled to respond, but Coupang's market share gains have continued without a blip," analyst Seyon Park wrote. The firm also raised its price target on the stock to $32 per share from $27 as Coupang is firing on all cylinders. "The company continues to execute well, is relatively insulated from tariff risk, and a beneficiary of a weaker USD [US dollar]," he said. Meanwhile, shares are up 27% and remain compelling. "Valuations also look favorable compared to relevant peers, " he went on to say. Nubank The LatAm bank is a share gainer and a top pick at the firm, according analyst Jorge Kuri and team. "We think the market continues to significantly underestimate Nubank's ability to scale profitably — especially through deeper cross-sell in Brazil," they wrote. The firm says Nubank has a differentiated offering for consumers as a one stop shop for all banking needs. "From leading in primary account relationships and salary deposits, to capturing the lion's share of consumer intent in credit card, personal loan, and payroll loan applications and balance transfers, Nubank is clearly far outpacing incumbent and digital peers," he said. The stock is up almost 16% this year, but Kuri says shares have plenty more room to run. "Nubank leads in both reach and relevance," he said succinctly. Seagate "The inflection in compute will drive exponential growth in storage demand, and we see STX as a still underappreciated play on this theme at just 7.5x our peak EPS. Tech leadership, premium margins, robust FCF generation, and strong cap returns support EPS upside and multiple re-rating from here. ... .A (still) underappreciated play on data growth; PT increases to $140 and we reinstate STX as our Top Pick." Coupang "The company continues to execute well, is relatively insulated from tariff risk & a beneficiary of a weaker USD. Valuations also look favorable compared to relevant peers. ... .Competitors have scrambled to respond, but CPNG's market share gains have continued without a blip. ... .Despite the market uncertainties this year, we are quite comfortable CPNG can deliver on its growth targets, while also being a beneficiary of a weaker US dollar." Nvidia "NVIDIA is putting digestion fears fully to rest, showing acceleration of the business other than the China headwinds around growth drivers that seem durable. Everything should get better from here. Reiterate OW, Top Pick in semis. ... .Bear case is fading and inference trajectory is durable; stay with the story. ... .Most of the themes we have been focused on played out through this quarter." Sallie Mae "SLM remains our Top Pick. ... .SLM exploring potential alternatives to whole loan sales, such as JVs, which we think could drive multiple expansion on more consistent asset-light cash flow. ... .Once we gain further clarity on government policy, we expect SLM will formally issue a range of estimates on how much additional volume it can drive in 2H26/2027." Nubank "We think the market continues to significantly underestimate NU's ability to scale profitably — especially through deeper cross-sell in Brazil. ... .From leading in primary account relationships and salary deposits, to capturing the lion's share of consumer intent in credit card, personal loan, and payroll loan applications and balance transfers, NU is clearly far outpacing incumbent and digital peers. ... .Nubank leads in both reach and relevance."