Morgan Stanley flags Western Digital, TeraWulf and Williams for earnings-driven stock moves

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Morgan Stanley flags earnings stock moves

Highlights

Morgan Stanley identifies 14 stocks with upcoming earnings catalysts, with positive catalysts for 12 names and downside risk for two, as only 41% of early S&P 500 reporters saw positive next-day reactions.
Western Digital, down over 32% in the past three months, is named a bullish pick ahead of earnings, with analyst Erik Woodring estimating December-quarter earnings 10% above consensus and long-term forecasts 15–40% above Street projections.
TeraWulf and Williams are overweight-rated due to AI-driven data center power demand, with Williams forecasted for 16% annual EBITDA growth through 2030 versus guidance above 11%.

Earnings setup and Morgan Stanley's top picks

As reported by CNBC, Morgan Stanley says 14 stocks have near-term catalysts that could drive meaningful moves after quarterly results, with 12 carrying positive catalysts and two facing downside risks.

In a Tuesday note, analyst Michelle Weaver says only 41% of the roughly 10% of S&P 500 companies that had reported by the time of the firm's analysis saw positive next-day stock reactions. Weaver says S&P 500 earnings revisions breadth for FY2 stands at +11% heading into the season, down from a late-June peak of +28%, while earnings growth expectations call for +33% in 2026 and +16% in 2027.

Western Digital is among Morgan Stanley's bullish calls ahead of earnings due Thursday after the bell. Analyst Erik Woodring says expectations have reset too far relative to fundamentals after recent underperformance, with shares down more than 32% over the past three months, and he expects strong hard disk drive demand and improving pricing to support better-than-expected results.

Woodring's December-quarter earnings estimate is about 10% above consensus, while his fiscal 2027 and 2028 estimates are 15% to 40% above Wall Street projections. He maintains an overweight rating on the stock.

AI-linked power demand supports TeraWulf and Williams

TeraWulf, which is set to report earnings on Nov. 6, is also on Morgan Stanley's list as demand for data center power capacity grows. Analyst Stephen Byrd says the company benefits from a strong record of signing agreements with data center customers and from management's experience in building power infrastructure assets.

Byrd says investors are undervaluing TeraWulf's high-performance computing leases, which he estimates generate nearly twice the per-share value reflected in the stock's trading price. He also says the company stands out from peers because of its large-scale power project experience, ability to secure customer contracts and growing access to grid capacity, and he rates the shares overweight.

Williams is another preferred name as AI-driven electricity demand lifts the outlook for data center power projects. Analyst Robert Kad forecasts about 16% annual EBITDA growth through 2030, above the company's guidance of more than 11%, and says Williams can offer turnkey power solutions to hyperscalers by combining natural gas supply, pipeline connectivity and onsite generation, with delivery possible within 18 to 24 months of contract execution.

Kad also has an overweight rating on Williams, which is scheduled to report earnings on Nov. 2.

In our earlier coverage of the S&P 500’s push toward 8,000, we noted that the next earnings season would be a key test for an AI-led rally amid higher oil prices, elevated Treasury yields, and political uncertainty. That piece also highlighted growing concerns about narrow market breadth and concentration risk, as strong headline profit growth increasingly depends on a small group of megacap leaders.

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