Top Analysts’ Picks for 2025: 3 of Morgan Stanley's Favorites

Key Points

• Morgan Stanley considers these three stocks among its best ideas for 2025.
• Analysts at the Wall Street firm see significant upside in these stocks in the data storage, retail investing, and enterprise software industries.
• President Trump's stance toward crypto helps one stock make Morgan Stanley's "Financials' Finest" list.

Among sell-side analysts on Wall Street, Morgan Stanley is one of the most well-known. The company’s large investment banking business, which generated $6.1 billion in revenue in fiscal 2024, contributes to the scope of its equity coverage. Below, I'll detail three stocks that are among the “Top Picks” of Morgan Stanley analysts. All return and implied upside figures use prices as of the Jan. 27 close.

Seagate: More Data Means More Storage

First up is Seagate Technologies NASDAQ: STX. Morgan Stanley's price target for the hardware company currently stands at $129. This implies that shares of Seagate could rise 25% in order to reach that level. Seagate is a leading manufacturer of hard disk drives (HDDs). This is where computers store files. HDDs can store lots of data at a lower price than solid-state drives (SSDs). Their disadvantage is that they are slower than SSDs, making them ideal for storing data that doesn’t need to be frequently accessed. This includes things like record retention, video, and data backups.

Seagate’s fiscal Q2 2025 earnings release resulted in Morgan Stanley raising expectations for the stock. The firm beat estimates on adjusted earnings per share significantly. Much of the bull case for Seagate centers around the idea of data storage becoming increasingly important. The firm’s Chief Executive Officer, William Mosely, highlighted this in the context of AI. He noted in the earnings call that “HDDs play a crucial role in housing the massive data sets required for training AI models." They store data when advanced chips don’t need to actively process it.

The firm’s HDD revenue increased 57% from the prior year.  Mass capacity devices now make up 87% of the firm’s HDD sales, up 10% from fiscal Q2 2024. This indicates increasing adoption from large customers who need to store huge amounts of data. It will be interesting to see if analysts change their view on the firm, given news surrounding DeepSeek AI that sent AI-driven stocks plummeting.

Robinhood: Trump Helps This Crypto Trading Platform

Morgan Stanley recently added Robinhood Markets NASDAQ: HOOD to the company’s “Financials’ Finest” list. Morgan Stanley raised its price target for the stock to $64 per share on Jan. 17. This implies upside in the stock of 34%. Robinhood shares have gone on a tear as of late, up over 75% in the past three months. However, analysts believe that upside remains due to the freshly in-office Trump administration. Many believe the new administration will favor cryptocurrency more than Biden's.

About 48% of Trump's corporate election contributions came from crypto firms. This shows strong support for his policies from the industry. Additionally, a Trump executive order titled “Strengthening American Leadership in Digital Financial Technology" looks to forward many interests of the crypto community.

Transaction fees from crypto trading make up a significant portion of Robinhood’s revenue. It generated $311 million from this stream over the past four quarters. A friendlier stance on crypto could boost prices and trading. This would raise Robinhood's revenue. There is also significant room for the company to continue growing internationally and in products like retirement accounts.

Atlassian: Cloud Migration, Gen AI Tools, Low Market Penetration

Last up is Atlassian NASDAQ: TEAM. Morgan Stanley has an overweight rating on the tech stock and a price target of $315. This target implies just under 18% upside in the company’s shares. Atlassian makes workplace productivity software that helps businesses increase collaboration between employees.

Bullishness stems from the company’s new product, Rovo, as well as its customer migration from its data center deployment to the cloud. Rovo is Atlassian’s new Gen AI tool, which the company hopes will be a significant growth driver. It lets users search for info in Atlassian and third-party apps. They can also chat with a bot that uses company-specific info.

If the company can get more customers to access its software over the cloud rather than using on-premise hardware, there are several benefits. First off, implementing new features and products becomes easier. This can increase the company’s ability to cross-sell, leading to higher growth. It could also lead to higher margins, as it can increase the economies of scale in its cloud segment, leading to lower costs per customer. Data center deployment still makes up 67% of revenue, meaning there is still much room for migration to the cloud.

Additionally, Atlassian is less than 7% penetrated in the $67 billion market it is targeting, suggesting significant room for growth.