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Morgan Stanley Downgrades Enterprise Products (EPD) as Growth Story Fades

Enterprise Products Partners L.P. (NYSE:EPD) is included among the Best Stocks for a Dividend Achievers List.

On December 18, Morgan Stanley downgraded Enterprise Products Partners L.P. (NYSE:EPD) to Underweight from Equal Weight and set a $34 price target. Keeping pace with the broader midstream group “is becoming harder to make,” the analyst wrote. Buybacks alone are unlikely to change that. Without a clearer growth story, Morgan Stanley does not see unit repurchases as enough to drive a meaningful re-rating.

That view comes as Enterprise Products Partners L.P. (NYSE:EPD) moves into a different phase of its cycle. The partnership is wrapping up a heavy investment period that started back in 2022. Roughly $6 billion of organic projects are set to enter commercial service in the second half of this year. These assets won’t deliver their full impact overnight, but as volumes build, cash flow should follow.

This year marks the high point for spending. Capital investment reached about $4.5 billion. Next year, management expects growth capital to drop sharply, down to roughly $2.2 billion to $2.5 billion. If the numbers play out, free cash flow should rise meaningfully in 2026. That extra cash gives Enterprise Products Partners L.P. (NYSE:EPD) more room to reward unitholders. The partnership recently expanded its repurchase authorization to $5 billion from $2 billion. It also continues to lean on its long-standing distribution record. The company has raised its payout for 27 straight years, including a 3.8% increase over the past year.

Enterprise Products Partners L.P. (NYSE:EPD) operates one of the largest midstream networks in North America.

While we acknowledge the potential of EPD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than EPD and that has a 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 12 Best Long Term US Stocks to Buy Now and 13 Top Tech Stocks Paying Consistent Dividends.

Disclosure: None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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