Morgan Stanley names GE Vernova, Lam Research, United as buys

Morgan Stanley identified GE Vernova, Lam Research and United Airlines as buy candidates ahead of the second-quarter earnings season, saying the firms could report results that beat Street estimates and lift shares.

For GE Vernova, Morgan Stanley pointed to new gas turbine contract wins and management comments that turbine reservations are sold out through 2030. The bank expects the company’s July 22 report to show stronger-than-expected results driven by demand for power equipment tied to data center expansion and industrial capital spending. Analyst Michael Wilson wrote that reshoring and higher international production costs could lengthen a U.S. industrial growth cycle.

GE Vernova has risen about 61% year-to-date and nearly 100% over the past 12 months, though its shares recently pulled back from an all-time high. The average analyst target for GEV is about $1,089 versus a recent share price near $1,067. Bernstein’s target is $1,206; Jefferies trimmed its target to $1,210 from $1,350.

On Lam Research, Morgan Stanley cited sustained AI-related demand and improving new equipment orders. Lam’s shares more than doubled this year and hit a record $437 in June before retreating roughly 20% to about $346. The firm expects revenue and earnings to beat estimates and for the company to raise earnings-per-share outlook as the cycle progresses. Morgan Stanley added that rising token prices and continued strength across the semiconductor equipment ecosystem support demand, while valuation remains a consideration: Lam’s forward price-to-earnings ratio is about 62, above several peers.

Analyst target updates for Lam include Stifel raising its target to $425 from $325 and Needham to $390 from $300. Mizuho, Susquehanna and Cantor Fitzgerald also moved targets higher.

For United Airlines, Morgan Stanley anticipates the carrier will provide positive forward guidance for the remainder of the year based on healthy booking trends. United’s stock is up about 7% year-to-date and has recovered roughly 43% from its low this year. Morgan Stanley wrote that airline demand and booking intent remain healthy, noting seven consecutive fare increases were absorbed without visible demand destruction.

Fuel costs present a risk to airline margins. Brent and WTI crude rose above $80 per barrel this week after renewed fighting in the region, reversing a recent dip following a brief ceasefire. Several firms, including Susquehanna, Cowen, Goldman Sachs, BMO and Bernstein, raised price targets for United this month.

Morgan Stanley’s selections come as the broader second-quarter earnings season begins and investors watch company guidance for signals about demand and capital spending. The bank’s calls focus on companies it expects to show revenue and profit upside tied to energy infrastructure, semiconductor equipment for AI, and travel demand supporting airline pricing.