Morgan Stanley, Charles Schwab, Leidos, and Others Featured in CNBC's 'Final Trades'
Morgan Stanley and Analyst Ratings: Joe Terranova from Virtus Investment Partners selected Morgan Stanley as his final trade, while Citigroup's Keith Horowitz maintained a Neutral rating and raised the price target from $130 to $155.
Exxon Mobil's Deal with Rosneft: Exxon Mobil has entered an agreement with Russia's Rosneft to explore recovering losses from its 2022 withdrawal, potentially reclaiming a $4.6 billion write-down.
Performance of Selected Stocks: Leidos Holdings, chosen by Stephen Weiss, saw a price target increase from $185 to $210, while shares of Charles Schwab and iShares Ethereum Trust ETF also experienced gains.
Market Trends: Charles Schwab reported a 15% growth in total client assets year-over-year, benefiting from high share prices and Federal Reserve rate cuts.
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- Investor Concerns: Investors are increasingly anxious about the potential effects of artificial intelligence on stock markets, not just in the U.S. but globally.
- Market Reactions: The uncertainty surrounding AI's impact is causing fluctuations in stock prices, leading to a cautious approach among investors.
- Global Sentiment: The apprehension about AI's influence is a widespread sentiment, affecting investor confidence across various markets.
- Future Implications: The ongoing developments in AI technology are prompting discussions about its long-term implications for investment strategies and market stability.
- Market Volatility Analysis: The S&P 500 index was nearly flat last week, closing at a level first reached 112 calendar days ago, reflecting a blend of optimism for economic recovery and the intertwining of an AI investment boom, despite mini-crashes in some sectors indicating internal market turbulence and uncertainty.
- AI Investment Outlook: With significant growth expected in AI capital expenditures for 2026, Nvidia's stock price remains flat compared to six months ago, and its forward P/E ratio has dropped to the lowest level since 2015, suggesting a cautious market sentiment regarding the future potential of the AI sector, which may impact investor confidence.
- Consumer Stock Performance: The relative weakness in consumer-exposed stocks contrasts sharply with the performance of traditionally defensive staples, leading to divergent interpretations in the market, which may reflect changes in cyclical demand or deeper economic concerns.
- Corporate Earnings Trends: The S&P 500 is projected to achieve low to mid-teens profit growth in the fourth quarter, surpassing consensus forecasts, yet the continuous outperformance of earnings results may lead to future adjustment risks as the market assumes such margins of victory.
- Amazon Investment Analysis: Bill Ackman's 13% stake in Amazon is driven by its strong e-commerce and cloud computing presence, with expected earnings growth of 17% annually over the next three years, making the current 28 times earnings valuation appear reasonable.
- AI-Driven Growth: Amazon's development of hundreds of generative AI applications has improved retail operational efficiency, with a 1.5 percentage point increase in operating margin in Q4 and a 24% growth in cloud services sales, highlighting the positive impact of AI investments.
- Meta Platforms Investment Outlook: Ackman's 10% investment in Meta benefits from its position as the second-largest ad tech company globally, leveraging AI to enhance ad performance, with a 6% year-over-year increase in ad prices in Q4 indicating strong advertiser demand.
- Smart Glasses Market Opportunity: Meta dominates the smart glasses market with over 70% share, and spending is forecasted to grow at 60% annually, presenting long-term growth opportunities through the integration of superintelligence systems.
- Executive Resignations: The release of Epstein-related documents by the U.S. Department of Justice has led to resignations from several high-profile executives, including the CEO of Dubai's largest port and Goldman Sachs' Chief Legal Officer, highlighting the severe impact of associations with Epstein on careers.
- Widespread Impact: These resignations not only affect individual careers but also pose potential reputational risks and operational challenges for the companies involved, especially in a climate where public sensitivity to sexual crimes is increasing.
- Political Repercussions: The government of UK Prime Minister Keir Starmer is also affected, despite his lack of direct ties to Epstein, as this incident could undermine his political support and influence future policy decisions.
- Social Response: Epstein's case has sparked widespread public discourse on the relationship between power and sexual crimes, prompting greater scrutiny of the moral responsibilities and transparency of high-level individuals, which may lead to stricter regulatory measures.
- Wealth Management Risks: The rise of advanced AI advisory tools poses a significant threat to wealth management firms like Charles Schwab (SCHW) and Raymond James (RJF), as clients may shift to cheaper digital alternatives, putting long-term pressure on their fee-based revenue models and profit margins.
- Insurance Industry Challenges: The development of AI assessment algorithms threatens the insurance brokerage sector, with companies like Marsh McLennan (MRSH) and Aon (AON) potentially losing their intermediary value due to AI-driven comparison engines, leading to downward pressure on stock prices.
- Increased Competition for Small Banks: The allure of digital banking powered by AI makes it difficult for small banks to compete effectively, as they often lack the resources needed to thrive in an increasingly competitive market, posing significant challenges to their business models.
- Data Dependency Issues: Companies reliant on publicly available data, such as Nasdaq (NDAQ) and S&P Global (SPGI), are facing vulnerabilities in their business models, as evidenced by their recent stock price declines, which reflect market concerns about their future prospects.
- Market Value Loss: On February 3, the software industry experienced a panic-driven loss of approximately $300 billion in market value, highlighting the urgent need for increased investments in AI security.
- Security Spending Priority: Morgan Stanley analyst Meta Marshall noted that 14% of organizations have reported AI-related breaches, projecting that the AI security market could grow from $16 billion to over $45 billion in the coming years, with a CAGR of 30-40%.
- Stock Recommendations: Marshall is optimistic about CrowdStrike (CRWD) and Palo Alto Networks (PANW), with price targets of $537 and $245 respectively, indicating potential upside of 25% and 47%.
- Long-Term Investment Opportunities: The analyst sees attractive entry points in stocks like Zscaler (ZS) and Netskope (NTSK), expecting Zscaler's annual recurring revenue growth to reach 24%-25% and Netskope's to exceed 30% year-over-year.








