Morgan Stanley Says Stay Invested – 2 Stocks to Consider Now
Last year’s bull run lost some momentum toward the autumn months, and more recently, stocks briefly slipped into correction territory. The selloff was driven by the war in the Middle East, involving the U.S./Israel and Iran, which pushed oil prices higher and unsettled investors.
Yet, the market’s response has been more measured than the headlines might suggest. With a ceasefire now in place and the S&P 500 rebounding about 7.5% from its March 30 low, the tone has already started to shift. While a large share of stocks did pull back sharply from their highs, Morgan Stanley’s chief U.S. equity strategist Mike Wilson notes that drawdowns of this magnitude are often seen closer to the end of a correction phase rather than the beginning.
Summing up the situation, Wilson writes, “For the past several months, my view has been very consistent. In short, I continue to believe we’re in a bull market that began last April, coming out of what I’ve described as a rolling recession between 2022 and 2025. That recovery remains intact despite recent threats… The market has already done a lot of the hard work. It has priced in geopolitical risk, private credit concerns and even negative side effects from AI, which is ultimately a productivity enhancing technology.”
The stock analysts at Morgan Stanley, seeing that the bull market still has legs, are picking out stocks for investors to consider now – and we’ve used the TipRanks platform to look up the latest details on two of their choices. Are these the right stocks to stay invested? Let’s give them a closer look and find out.
NovaGold Resources(NG)
Canada has long been a leader in the mining industry, and NovaGold, founded in 1984 and based in Vancouver, BC, is on the verge of becoming a major player in Canada’s – and North America’s, generally – gold mining scene. The company is at the BFS, or bankable feasibility study, stage of developing its major asset, the Donlin Gold Project of southeastern Alaska. The company is expected to complete the BFS next year. Assuming a positive response to permitting requests, the company expects to run construction activity on the mine from 2027 through 2031.
BFS completion is a key milestone on the way to opening a mine and starting production; essentially, it gives the company a verified paper trail to show banks and investors as proof that the project will be profitable. In the case of Donlin, the project has the potential to become one of the largest gold mines on earth, with measured and indicated mineral resources estimated at 40 million ounces, the potential to produce 1.1 million ounces of gold annually, and an estimated productive lifetime of 27 years or more. The project includes substantial exploration potential. At the known grade of 2.22 grams per metric ton, Donlin is currently known as one of the world’s highest-grade development-stage open-pit gold projects.
In addition to possessing a top-tier asset, NovaGold also benefits from the location of that asset. Donlin’s Alaska location is prime territory for gold miners; the state has a long history with the mining industry – Alaska had a gold rush in the 1890s – and in an increasingly dangerous world, it is considered one of the world’s safest geopolitical mining regions, with a stable government and predictable regulations. Combined with the $393 million in cash which the company held as of February 28 this year, all of this makes NovaGold an attractive choice for investors seeking exposure to gold.
Morgan Stanley’s 5-star analyst Carlos De Alba notes all of this in his upbeat report on NovaGold, in which he states, “We are OW NovaGold shares given its attractive exposure to the Donlin project, one of the largest and highest grade undeveloped gold assets globally. Development is well timed amid a supportive gold price backdrop, with Donlin expected to produce ~1.1Moz annually over a 27-year mine life at ~$830/oz (real). Remaining permits, completion of the bankable feasibility study (BFS) and the final construction decision are key catalysts.”
That Overweight (i.e., Buy) rating is accompanied by a $13.80 price target, suggesting a one-year upside potential for the stock of 48%. (To watch De Alba’s track record, click here.)
Currently, NG shares are selling for $9.34, and their $14.23 average target price implies a bullish upside of 52% for the coming year. The stock has 6 unanimously positive analyst reviews on record, supporting its Strong Buy consensus rating. (See NG stock forecast)
Unity Software(U)
Next on our list of Morgan Stanley stock picks is Unity Software, a software company with 20 years in the gaming business. Unity provides a software platform for creating video games – and for creating those games from the ground up. The platform lets users design the game, lay it out in 2D or 3D formats, expand the game, build an audience, and develop an interactive experience for players. The platform, and the games created on it, can be made available on all major mobile, PC, console, and XR operating systems.
Unity prides itself on giving a wide range of services to its users. These include acquisition apps that facilitate audience development, as well as monetization apps that let creators turn their games into revenue generators. Unity itself exemplifies the expansion capabilities it offers in game creation – the company has pushed its platform outside of the gaming industry, into such fields as 3D training, customer experience, immersive training, manufacturing, and retail. The company has made its systems compatible with the new VR and AR interface devices, to increase the flexibility it can offer users.
Along with all of this, Unity also offers its customers an AI-powered ad platform, capable of driving growth by leveraging data from across Unity’s ecosystem. Vector is designed to connect the right players with the right games, to make in-game advertising more efficient and more cost-effective. The aim is to provide a holistic view of game and player intelligence, to support monetization models, and to allow for continuous innovation through AI.
With all of that, Unity has had a tough year. The shares are down 51% year-to-date. Headwinds include worries about increased competition, especially from AI-centered services such as Google’s ‘Project Genie,’ that could cut into the user base for Unity’s style of software-based game development engines. Weak forward guidance in the last earnings report didn’t help, either.
That earnings report covered 4Q25. The forward guidance was set in the range of $480 million to $490 million in revenue for the upcoming Q1, below the $492.1 million expected. On the plus side, Q4 had revenues of just over $503 million, a total that was up 10% year-over-year and beat the forecast by over $10 million. Unity’s bottom line in 4Q25 came to 24 cents per share in non-GAAP measures, or 3 cents better than had been expected.
Matthew Cost, covering this stock for Morgan Stanley, notes the strength of Vector, and the role that Vector played in boosting the 4Q results. He wrote, “Vector posted its 4th consecutive quarter of >15% q/q (78% y/y in 1Q), which we note is nearing the levels APP demonstrated in some of its strongest quarters following the launch of AXON 2.0. In other words, this product is working and the data is piling up to prove it… We were particularly encouraged to hear that the strong Vector results in 1Q did not reflect the benefits of the upcoming runtime data integration, which is still set to launch in 2Q. We continued to see that initiative as one of the most impactful, unique opportunities that U can tap to drive growth in ad revenue.”
Looking ahead, Cost adds, “While 22x represents a premium to peer multiples, we believe this is justified by U’s leadership position as a game development platform, with the data and go-to-market advantages that it confers on the advertising business. We also continue to believe that U’s ad business retains significant opportunity to drive earnings revisions from here.”
The analyst follows these comments with an Overweight (i.e., Buy) rating, and a $32 price target that implies a gain of 48% in the next 12 months. (To watch Cost’s track record, click here)
Unity has earned a Moderate Buy rating from the Street’s consensus, based on 17 recent analyst reviews that include 12 Buys to 5 Holds. The shares are priced at $21.57 and their average target price of $32.50 suggests a one-year upside of 51%. (See U stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
