Morgan Stanley’s Top 10 Stock Picks for 2022

Published January 22, 2022 at 10:01 am EST Updated September 7, 2026 at 1:55 pm EDT

In this article, we will be taking a look at Morgan Stanley’s top 10 stock picks for 2022.

In the aftermath of the breakout of the coronavirus pandemic in 2019, the world has been plunged into a whirl of unknowns. The economy is no exception to this development, plunging into a recession caused by the pandemic, marked by market liquidity, high inflation, and strained labor markets. Subsequent to these developments, the year 2022 is now being dubbed by investors and financial institutions as the critical year of recovery, during which the pandemic-wrought economic imbalances will get resolved, and the business cycle will recover. Morgan Stanley is one such commenter, as evidenced by their 2022 outlook report.

While the bank does not promise a return to the pre-pandemic market, it has commented that the economic and market environment in 2022 will be reflationary and marked by higher economic growth than 2021, alongside higher inflation and higher real interest rates. In such a market, Morgan Stanley has recommended that investors should focus on “technology takers,” or companies that are equipped to increase tech adoption.

The financial institution backed a number of big names in 2021, most of which performed exceptionally in the financial year. Capital One Financial Corporation (NYSE:COF) is one such company. The stock is up 40% in the last 12 months. It has also received a Buy rating from Barclays analyst Jason Goldberg in January.

A popular stock pick for Morgan Stanley in 2021 was Meta Platforms, Inc. (NASDAQ:FB), formerly Facebook. Last year, the firm commented that the metaverse was an $8 trillion addressable market. It added that the company’s growth durability and strong free cash flow despite investing billions in social networking makes it an obvious stock pick. In the fiscal third quarter, the company’s EPS was $3.22, beating estimates by $0.04.

Like JPMorgan Chase & Company (NYSE:JPM), The Coca-Cola Company (NYSE:KO), Amazon.com, Inc. (NASDAQ:AMZN), and Medtronic plc (NYSE:MDT), top stock picks by Morgan Stanley for 2022 worth a look.

Image by Blomst from Pixabay

Our Methodology

We have used Morgan Stanley analyst opinions, reports, and finance opinion articles to pick stocks considered to be top performers by the financial organization. They are ranked on the basis of the number of hedge funds holding stakes in them, from the lowest to the highest. For hedge fund information, we have used Insider Monkey’s hedge fund data for the third quarter of 2021, when 867 hedge funds were tracked.

Morgan Stanley’s Top Stock Picks for 2022

10. Rivian Automotive, Inc. (NASDAQ:RIVN)

Number of Hedge Fund Holders: N/A

Rivian Automotive, Inc. (NASDAQ:RIVN) is a developer and manufacturer of electric adventure vehicles. The company offers five-passenger pickup trucks and sports utility vehicles to its customers, alongside electric SUVs and electric pickup vehicles. It has been reported that a team of Morgan Stanley analysts led by Adam Jonas ranked Rivian Automotive, Inc. second on their list of favorite electric vehicle stocks for 2022, in a note released by the Autos and Shared Mobility team. It is thus among Morgan Stanley’s top stock picks for 2022.

This January, Morgan Stanley’s Adam Jonas also reiterated an Overweight rating on Rivian Automotive, Inc. shares.

Comus Investment LLC, an investment management firm, mentioned Rivian Automotive, Inc. in its fourth-quarter 2021 investor letter. Here’s what they said:

“Thesis investing ties hand-in-hand with the concept of intrinsic value, the all-important but equally useless term which suggests investors can estimate what companies are worth, with these estimates frequently supported by data which don’t exist, or which are expected to appear in the future, and which often deviate substantially from that shown in the past or present. These estimates of intrinsic value can vary dramatically based on our inputs of growth and profitability, and they are all incorporated into the stock pricing we currently see. Rivian Automotive, Inc., for example, with its $90 billion valuation and complete lack of any revenue (though it does have pre-orders), must incorporate the idea that this venture, which is currently smaller than your local coffee shop, will be wildly successful. People are clearly paying good money for it and have optimism about its future.”

9. FREYR Battery (NYSE:FREY)

Number of Hedge Fund Holders: 20

FREYR Battery (NYSE:FREY) is a company based in Norway, working on manufacturing battery cells with sustainable energy. The company ranked third on Morgan Stanley’s favorite electric vehicle stock for 2022 list, courtesy of analyst Adam Jonas, making it one of Morgan Stanley’s top stock picks for 2022 in the EV sector.

Adam Jonas from Morgan Stanley holds an Overweight rating on FREYR Battery shares as well, as of this January.

The EPS for FREYR Battery in the fiscal third quarter was -$0.42. It has gained 12.7% in the past six months.

Our hedge fund data shows 20 hedge funds holding stakes in FREYR Battery in the third quarter of 2021, with a total stake value of $378 million. The largest stakeholder for the quarter was Sylebra Capital Management, holding 12,419,240 shares worth over $122 million.

Like JPMorgan Chase & Company, The Coca-Cola Company, Amazon.com, Inc., and Medtronic plc (NYSE:MDT), FREYR Battery is a noteworthy stock to invest in this year.

8. Ferrari N.V. (NYSE:RACE)

Number of Hedge Fund Holders: 27

Like the two stocks above, Ferrari N.V. (NYSE:RACE) is among Morgan Stanley’s top stock picks for 2022, ranking first on the Adam Jonas-led team’s list of favorite EV stocks for 2022. The stock has replaced General Motors as Morgan Stanley’s top pick this year. Ferrari N.V. itself designs, engineers, produces and sells luxury performance sports cars, and is a prospective big player in the EV sector.

Analyst Adam Jonas at Morgan Stanley holds an Overweight rating on Ferrari N.V. shares as well, as of January 2022.

The company’s fiscal third quarter report shows an EPS of $1.29, beating estimates by $0.13. Its revenue of $1.22 billion was up 17.4% year over year. Ferrari N.V. has also gained 20.2% in the past six months.

For Ferrari N.V., our data shows 27 hedge funds long the stock in the third quarter. Their total stake value was $1.2 billion approximately, higher than the $992 million figure in the second quarter.

Ensemble Capital, an investment management firm, mentioned Ferrari N.V. in its second-quarter 2021 investor letter. Here’s what they said:

“Ferrari: After posting standout performance in 2020, beating the S&P 500 by over 20%, Ferrari’s share price performance has lagged for much of this year. The main issue this quarter was the company pushing out their medium-term financial targets due to development and production delays caused by COVID, but this only led to a 1% decline in the stock price for the full quarter. While we believe the company did a fantastic job maintaining production in light of COVID, it did not surprise us that some of their longer-term, new model introductions might be delayed by a couple of quarters. While disappointing of course, Ferrari N.V. is curating a set of extremely exclusive mechanical works of art and we are much happier seeing them take the time to do things right, rather than rushing to meet a self-imposed financial target.”

7. Northrop Grumman Corporation (NYSE:NOC)

Number of Hedge Fund Holders: 29

Northrop Grumman Corporation (NYSE:NOC) is an aerospace and defense company operating through its Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems segments. The company was dubbed as the “preferred Defense prime” for investors by Morgan Stanley analyst Kristine Liwag in December 2021. Liwag added that the stock was her preferred pick to “play the Great Power Competition theme in 2022,” making it one of Morgan Stanley’s top stock picks for 2022.

In December 2021, Liwag reiterated an Overweight rating on Northrop Grumman Corporation shares.

With an EPS of $6.63, beating estimates by $0.65, and a revenue of $8.72 billion, Northrop Grumman Corporation exceeded expectations in the fiscal third quarter of 2021.

Out of the 29 hedge funds holding shares in the company in the third quarter, Yacktman Asset Management was the largest stakeholder. The fund held 437,931 shares in Northrop Grumman Corporation, worth about $157 million.

Like JPMorgan Chase & Company, The Coca-Cola Company, Amazon.com, Inc., and Medtronic plc (NYSE:MDT), Northrop Grumman Corporation is a stock investors are vying after today.

6. Lockheed Martin Corporation (NYSE:LMT)

Number of Hedge Fund Holders: 51

Lockheed Martin Corporation (NYSE:LMT) is a security and aerospace company, working on the research, design, development, manufacture, integration, and sustainment of technology systems, products, and services. The company is among Morgan Stanley’s top stock picks for 2022, with analyst Kristine Liwag backing its performance.

Liwag holds an Overweight rating on Lockheed Martin Corporation shares as of December 2021.

According to the company’s fiscal third quarter earnings report, Lockheed Martin Corporation had an EPS of $6.93, beating estimates by $0.13.

Out of 867, 51 hedge funds were long Lockheed Martin Corporation in the third quarter of 2021, compared to 58 hedge funds in the previous quarter.

Vltava Fund, an investment management firm, mentioned Lockheed Martin Corporation in its fourth-quarter 2021 investor letter. Here’s what they said:

“Of course, not all of our companies are doing better than we expected. Lockheed Martin fell somewhat short of our expectations last year. In the cases of Lockheed Martin Corporation disruptions in the supply and logistics chains. Lockheed uses a great many subcontractors from various countries and could not avoid issues with continuity of supplies. As a result, production will be slightly lower than we had expected.”

5۔ Tesla Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 60

Tesla Inc. (NASDAQ:TSLA) is another automobile manufacturer among Morgan Stanley’s top stock picks for 2022. The company works with electric vehicles and energy generation and storage systems. Analyst Adam Jonas at Morgan Stanley ranked it fourth on the firm’s list of favorite EV stocks for 2022.

Jonas also holds an Overweight rating on Tesla Inc. shares as of this January.

In the third quarter of 2021, 60 hedge funds were long Tesla Inc., with a total stake value of $10.6 billion.

4. TransDigm Group Incorporated (NYSE:TDG)

Number of Hedge Fund Holders: 63

TransDigm Group Incorporated (NYSE:TDG) is a designer and producer of aircraft components. In the aerospace sector, the company was named the top pick for Morgan Stanley in North America for 2022 by analyst Kristine Liwag. As such, it is among Morgan Stanley’s top stock picks for 2022.

Analyst Liwag also holds an Overweight rating on TransDigm Group Incorporated shares as of December 2021.

For the fiscal fourth quarter, TransDigm Group Incorporated had an EPS of $4.25, beating estimates by $0.55. Its revenue was $1.28 billion.

Our data shows 63 hedge funds holding stakes in TransDigm Group Incorporated in the third quarter, compared to 57 hedge funds in the previous quarter.

3. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 88

Wells Fargo & Company is a financial services company with about $1.9 trillion in assets. It serves one in three US households and over 10% of all middle market companies in the US. CNBC has reported that the stock is among Morgan Stanley’s top stock picks for 2022, being a top play for rate hikes because of its rate-sensitive, attractive valuation.

Analyst Betsy Graseck at Morgan Stanley upgraded Wells Fargo & Company shares to Overweight in December 2021.

The EPS for Wells Fargo & Company in the fiscal fourth quarter was $1.25, while its revenue was $20.86 billion. Both beat estimates by $0.25 and $2.19 billion, respectively.

Insider Monkey’s hedge fund data for Wells Fargo & Company shows 88 hedge funds long the stock in the third quarter. Their total stake value was $6.2 billion.

Davis Funds, an investment management firm, mentioned Wells Fargo & Company in its third-quarter 2021 investor letter. Here’s what they said:

“…This second chart highlights that financials remain the cheapest part of the market today and continue to be extremely attractive. Strong capital ratios, conservative lending practices, already recordlow interest rates and now a strengthening economy, all paired with low valuations, bode well for future returns.

Take our top financials holding in Wells Fargo, for instance. Wells Fargo is trading at 1.3x tangible book value, while we expect return on equity (ROE) to be in the mid-to-high teens over time. Even in this low-rate environment, the current multiple is only 12x 2021 owner earnings, and our IRR estimate is 12–13%. Wells Fargo has performed well this year, up 51% year-to-date, yet still looks very attractive, which speaks to how undervalued it was and why it is so important to be patient when investing in high-quality companies trading at low valuations. Rather than invest on the basis of unpredictable near-term catalysts, we prefer to be patient as earnings and cash build up, even if the stock price does not immediately reflect the economic reality. We continue to like our positions in financials.”

2. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 120

Apple Inc. (NASDAQ:AAPL) is an information technology company that manufactures and markets smartphones, computers, tablets, wearables, and accessories under the Apple brand. CNBC’s report in December cemented the stock’s position as one of Morgan Stanley’s top stock picks for 2022, with analysts labeling it a smart bet for the year.

As of December 2021, Apple Inc. has an Overweight rating at Morgan Stanley, placed by analyst Katy Hubert.

In the fiscal fourth quarter of 2021, the company’s EPS was $1.24, in line with estimates. Its revenue was $83.36 billion. Apple Inc. has also gained 21.5% in the past six months.

According to our research, 120 hedge funds held stakes in Apple Inc. in the third quarter, with a total stake value of $146 billion.

Guardian Fund, an investment management firm, mentioned Apple Inc. in its fourth-quarter 2021 investor letter. Here’s what they said:

“Apple’s market value has increased by USD 700 million per day since Tim Cook became CEO in 2011. As a result, Apple is worth more than the entire crypto market, and Microsoft is worth more than all 900 or so unicorns in the world. Both examples illustrate how scalable internet-enabled companies have become as well as how undervalued the rest of the world’s most promising innovation may be.”

1. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 143

Uber Technologies, Inc. (NYSE:UBER) is a developer and operator of proprietary technology applications to connect consumers with independent providers of ride services for ridesharing and other transportation services. The company is among Morgan Stanley’s top stock picks for 2022 according to a CNBC report. Morgan Stanley analysts have commented that the stock is among the best bets outside of FAANG (Meta, Amazon, Apple, Netflix, and Alphabet) stocks.

Analyst Brian Nowak at Morgan Stanley holds an Overweight rating on Uber Technologies, Inc. shares as of November 2021.

For the last stock on our list, our data shows 143 hedge funds long in the third quarter and 135 hedge funds long in the second quarter.

ClearBridge Investments, an investment management firm, mentioned Uber Technologies, Inc. in its third-quarter 2021 investor letter. Here’s what they said:

“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”

You can also take a look at 10 Best Value Stocks To Buy Now and Top 20 Japanese Companies.

Follow Insider Monkey on Twitter