Lam Research Corporation

(NASDAQ Global Select)
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Bullish +65

Buy GE Vernova, Lam Research, United Airlines stocks: Morgan Stanley

AI-generated analysis

πŸ“ˆ Morgan Stanley rates GE Vernova (GEV), Lam Research (LRCX), and United Airlines (UAL) as top picks for Q2 earnings season outperformance.

πŸ”‹ GE Vernova is expected to bounce after July 22 earnings, driven by gas turbine contract wins and a sell-out narrative through 2030.

✈️ United Airlines faces asymmetric upside if positive forward guidance holds while jet fuel costs remain manageable post-ceasefire.

πŸ’» Lam Research benefits from robust AI demand with improving new equipment orders despite a recent 20% stock pullback.

πŸ“‰ GE Vernova stock has risen 61% this year but recently wavered below its all-time high of $1,089 analyst average target.

✈️ United Airlines shares jumped 43% from yearly lows as lower oil prices and healthy bookings support pricing power.

πŸ“Š Lam Research trades at a forward P/E of 62, significantly higher than peers like Nvidia and Micron due to AI growth expectations.

🀝 Multiple analysts including Stifel, Needham, and Mizuho have raised price targets for Lam Research following positive sentiment.

⚠️ Key risk for United Airlines involves geopolitical tensions reigniting between the US and Iran, potentially spiking oil prices.

🏭 GE Vernova management signals the U.S. industrial economy may be entering a sustained growth cycle via reshoring.

Bullish Signals
  • Morgan Stanley explicitly identifies GE Vernova, Lam Research, and United Airlines as stocks expected to outperform during the upcoming earnings season.
  • GE Vernova is projected to publish stronger-than-expected numbers on July 22, validated by new gas turbine contracts and a management sell-out forecast through 2030.
  • United Airlines has demonstrated resilience with seven consecutive price increases absorbed without demand destruction, indicating strong pricing power.
  • Lam Research reports robust AI demand with rising token prices and continued ecosystem strength despite recent market pullbacks.
  • New equipment orders for Lam Research are improving, suggesting a healthy pipeline of revenue growth in the semiconductor sector.
  • Analyst consensus for United Airlines remains bullish, with major firms like Susquehanna, Cowen, and Goldman Sachs boosting their price targets this month.
  • GE Vernova's stock has appreciated significantly, rising 61% this year and nearly 100% over the last 12 months due to power equipment demand.
  • Lam Research is expected to boost earnings per share upon releasing better-than-estimated revenue and earnings in the coming quarter.
Risk Factors
  • United Airlines faces a key risk if geopolitical tensions between the US and Iran reignite, potentially causing oil prices to spike and forcing fare rollbacks.
  • Lam Research carries valuation concerns with a forward price-to-earnings ratio of 62, which is much higher than peers like Nvidia and Micron.
  • GE Vernova's stock recently wavered and sits below its all-time high, meaning upside is tied to execution rather than hype.
Full Analysis
Morgan Stanley has identified three stocks poised for outperformance as the second-quarter earnings season begins: GE Vernova (GEV), Lam Research (LRCX), and United Airlines (UAL). The bank anticipates strong quarterly results from all three, driven by specific catalysts including post-earnings bounces, positive forward guidance, and robust AI-related demand. For GE Vernova, the firm expects a bounce after earnings on July 22, supported by stronger-than-expected gas turbine contract wins and management's projection of selling out reservations through 2030. The stock has surged over 60% this year, though it recently wavered below all-time highs. Analysts cite broadening capital expenditure beyond data centers and reshoring trends as key drivers for sustained growth. United Airlines is highlighted due to expectations of positive forward guidance and resilient booking momentum that has absorbed seven consecutive price increases. The stock has rebounded 43% from its yearly low, aided by lower jet fuel prices following a US-Iran ceasefire. However, geopolitical risks remain a primary concern if fighting resumes and oil prices spike. Lam Research is viewed as a top pick with AI demand remaining robust despite recent market pullbacks that pushed shares down 20% from record highs. The company is expected to deliver better-than-estimated revenue and earnings per share. While valuation concerns persist with a forward P/E of 62, multiple analysts have raised their price targets, citing improving new equipment orders and strength across the AI ecosystem.