Morgan Stanley is bullish on GE Vernova, Lam Research, and United Airlines, projecting strong performance heading into their second-quarter earnings reports. The investment bank anticipates these ‘overweight’ rated stocks will exceed estimates and potentially raise forward guidance, driven by factors like AI-fueled energy demand, robust travel bookings, and a surging semiconductor sector. Investors are watching closely as earnings season unfolds, with the S&P 500 nearing its June all-time highs.
As earnings season hits its stride, Wall Street giant Morgan Stanley has identified a select group of stocks positioned to deliver impressive second-quarter profit surprises. Among its top recommendations are industrial powerhouse GE Vernova, semiconductor equipment leader Lam Research, and airline giant United Airlines.
With the broader S&P 500 index maintaining close proximity to its record highs achieved in June, trading above 7,500, investors are keenly focused on upcoming corporate reports. Morgan Stanley's analysts rigorously screened for companies holding an 'overweight' rating, anticipating them to not only surpass key performance indicator estimates but also to potentially elevate their forward earnings guidance or prompt upward revisions from analysts post-results.
GE Vernova: Powering Ahead
GE Vernova shares are expected to climb, especially if the company's upcoming earnings forecast exceeds expectations, driven by its robust new gas turbine contracts, Morgan Stanley highlighted. The stock has already seen a remarkable 64% surge year-to-date, fueled by an escalating global investment in artificial intelligence which in turn boosts demand for critical energy infrastructure. Earlier this year, GE Vernova's CEO communicated to investors that the company anticipates selling out its turbine reservations through 2030, underscoring strong long-term demand.
Further bolstering its outlook, GE Vernova is set to benefit from broader industry tailwinds. Analyst Michael Wilson noted on Monday that "The industrial backdrop continues to strengthen," with capital expenditure extending beyond data centers. He added that "reshoring progress suggests the U.S. industrial economy may be entering a sustained growth cycle as international production becomes more expensive than domestic." GE Vernova is slated to release its second-quarter results on July 22.
United Airlines: Flying High
United Airlines could achieve further gains following its earnings report, particularly if it provides an optimistic financial outlook for the remainder of the year, according to Morgan Stanley. The airline's stock has ascended 24% over the last three months, buoyed by consistently strong travel bookings despite recent flight disruptions and increased ticket prices, partly linked to geopolitical tensions.
Morgan Stanley's airline analyst commented, "Airline demand and booking intent remain healthy, with seven consecutive price increases absorbed without demand destruction." They further noted, "With oil prices moving lower, airlines are unlikely to roll back pricing, though sustained demand will remain the key test." United Airlines is scheduled to announce its second-quarter earnings on Wednesday.
Lam Research: Riding the AI Wave
Lam Research is predicted to rally post-earnings, especially if it issues a robust revenue outlook for the current quarter, as per Morgan Stanley. The semiconductor manufacturing equipment provider has seen its shares more than double in 2026, marking a 102% increase, a testament to the booming artificial intelligence sector.
A Morgan Stanley analyst recently observed, "AI demand remains robust with rising token prices and continued strength across the ecosystem despite recent market pullbacks." The report also pointed to improving new equipment orders. Lam Research is scheduled to report its earnings on July 29.
