Several stocks are poised to rise as companies continue to report third-quarter results over the coming weeks, according to Morgan Stanley. According to FactSet data, major banks that have reported earnings so far have generally posted better-than-expected sales and earnings per share for the three months ending Sept. 30. More than 80% of companies that have reported results so far since earnings season began have shown that they have beat Wall Street expectations. “The low number of downward revisions to third-quarter results suggests that companies are already confident they can meet or exceed expectations,” Morgan Stanley analysts led by Michelle Weaver said in a note to clients on Tuesday. “Interestingly, stock-specific risk has risen sharply and is at its highest level since 2020, suggesting a favorable environment for stock selection as we head into the peak reporting season,” the analysts added. Morgan Stanley highlighted several stocks that could soar as earnings season gets into full swing. Its top picks are in a wide range of industries, from software to social media to airlines. Here are three of Morgan Stanley’s top picks: Atlassian Morgan Stanley says the software company’s stock is likely to rise due to growing demand for its app development tools. Additionally, Atlassian announced last month that it will move to the cloud by 2029. This will improve the company’s ability to monetize its expanding solution set, the bank’s analysts said. Morgan Stanley rates Atlassian Overweight, with a price target of $320 per share. Atlassian is down more than 14% in the past three months. The stock price has fallen about 31% since the beginning of the year. Metaplatform Morgan Stanley analysts say the social media company’s stock has room to survive thanks to user engagement and growth in its advertising business. Meta may also expand by integrating several graphics processing unit-enabled improvements to its family of apps, including Instagram. Morgan Stanley rates Meta stock Overweight and has a price target of $850. WhatsApp’s parent company rose about 25% in 2025. Southwest Airlines Southwest Airlines’ stock has a lot of room for upside as the airline continues to overhaul its business and Wall Street remains sleepy on the stock. “Despite, or perhaps because of, the stock’s performance, investor sentiment remains strategically cautious, and a beat + strong call/guide could push the stock further higher,” analysts at the investment bank wrote in a note. Since September 2024, Southwest Airlines has implemented several cost-cutting measures as well as working to improve operational efficiency by reducing turn times and implementing red-eye flights to increase aircraft availability. Morgan Stanley’s price target for airline stocks is $38 per share. Southwest Airlines stock has increased about 15% over the past year.
