Morgan Stanley expects a handful of stocks that are reporting quarterly results soon to see big gains. Second-quarter earnings season has so far impressed Wall Street, even as investors keep an eye on commentary about tariff-related uncertainty and artificial intelligence spending and demand. Of the 88 S & P 500 companies that have reported results, more than 82% have beaten analysts’ estimates, according to FactSet data. Analyst Michelle Weaver wrote in a Tuesday note to clients that Morgan Stanley expects a “normal” rate of companies outpacing earnings estimates this season. “Given the downward EPS revisions we saw in April / May and the subsequent recovery in Earnings Revisions Breadth from –25% to ~1% , we expect the index to deliver 2Q beat rates roughly in line with historical averages (4-5%),” Weaver wrote. She added, earnings should be “top-heavy,” led by strong year-over-year “Magnificent Seven” net income growth. Below are five of Morgan Stanley’s 13 highest conviction plays. These are stocks in which near-term catalysts should drive “a meaningful move” upward, according to the firm. Morgan Stanley views Nvidia as an earnings winner. The firm rates the chipmaking giant overweight with a $170 price target, which implies 1.8% potential upside. “Expect the pace of revenue and EPS to accelerate on the print, as demand remains very strong and NVDA continues to deliver upside on the supply side having resolved issues with rack scale products,” the firm said about the stock. Analysts are bullish that Nvidia’s revenue growth in the second half of 2025 and 2026 will improve after the company resumes shipments of previously banned H20 chips to China. CVS Health is another name Morgan Stanley likes, with an overweight rating and a price target that implies the stock could gain about 31%. Analyst Erin Wright called CVS a “compelling turnaround story in Managed Care,” given its focus on the Medicare Advantage business, which she said has earnings power. “CVS should be a cleaner print in what has been a volatile period for Managed Care, with another ‘beat and maintain’ or ~in line quarter likely, in our view, offering welcomed relief,” Wright said. CVS in the first quarter exceeded estimates and hiked its earnings guidance , but did not provide a revenue forecast given uncertainty with higher medical costs from more Medicare Advantage patients returning to hospitals. CVS 1Y mountain CVS Health performance over the past year. AI data center play Eaton has room for upside, according to analyst Chris Snyder. He views the stock as attractively positioned heading into earnings due to margins in its Electrical Americas business. “We have confidence in both ETNs pricing power & ability to drive volumes higher given company backlog and ongoing capacity adds,” the analyst said.
