tech
February 9, 2026
Morgan Stanley says buy 2 beaten-down software stocks. We agree on one of them
There's still opportunity in software despite the fears about artificial intelligence, according to Morgan Stanley analysts.
TL;DR
- Enterprise software stocks, including Microsoft and Salesforce, have seen significant declines.
- Concerns exist that AI could enable businesses to create software in-house or reduce headcount, impacting software companies.
- Morgan Stanley views these AI-related concerns as manageable execution risks rather than existential threats.
- Morgan Stanley recommends buying Microsoft and Salesforce, citing attractive valuations.
- The article's authors agree with buying Microsoft but disagree on buying Salesforce.
- Microsoft's cloud business (Azure) and its established software suites are highlighted as strengths.
- Salesforce has faced scrutiny regarding its valuation and future earnings potential.
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