Best Application Software Stocks for 2026: Morgan Stanley’s Favorite Picks

Investing.com -- Netflix shares have fallen more than 35 percent from their June 2025 peak, leaving investors questioning what comes next as the company faces a mix of margin uncertainty, engagement challenges and shifting deal dynamics tied to Warner Bros. Discovery. 

Bernstein said Netflix now trades at roughly 22 times its 2027 earnings estimate, noting that the stock “looked even more compelling immediately following the Q4 print” before sentiment softened again.

Bernstein analyst Laurent Yoon said three issues are at the center of the current debate. 

The first is 2026 margin expectations. Netflix’s guidance for a 32 percent EBIT margin “came in well below expectations,” and while Bernstein expects the company to raise its margin outlook later this year, the firm also warned that stepping up content spending may be necessary. 

Yoon wrote that achieving a mid-30 percent margin in 2026 “may prove ambitious,” even if a mid-year revision remains likely.

The second overhang is engagement. Bernstein believes “there is no silver bullet” to reverse shifting consumption patterns, but Netflix is broadening its programming mix across local and global markets to address the trend.

The third, and potentially most consequential, factor is Netflix’s pursuit of WBD. 

Yoon wrote that WBD’s content library “could accelerate PxQ for Netflix,” though the acquisition would come with a “hefty price tag.” 

The upside for investors “ultimately hinges on the outcome of the current WBD process,” Bernstein said, outlining scenarios that range from Netflix securing WBD at the current bid to rival PSKY pursuing a highly levered deal that limits competitive risk.

Investing.com – Morocco stocks were lower after the close on Friday, as losses in the Utilities, Banking and Mining sectors led shares lower.

At the close in Casablanca, the Moroccan All Shares lost 1.52%.

The best performers of the session on the Moroccan All Shares were Wafa Assurance (CSE:WAA), which rose 8.25% or 376.00 points to trade at 4,934.00 at the close. Meanwhile, Realis. Mecaniques (CSE:SRM) added 5.72% or 25.95 points to end at 479.95 and Marocaine pour le Commerce et l’Industrie Banque SA (CSE:BCI) was up 4.83% or 29.00 points to 630.00 in late trade.

The worst performers of the session were SMI (CSE:SMI), which fell 9.99% or 734.00 points to trade at 6,616.00 at the close. Miniere Touissit (CSE:CMT) declined 9.97% or 285.00 points to end at 2,575.00 and Managem (CSE:MNG) was down 5.16% or 449.00 points to 8,251.00.

Falling stocks outnumbered advancing ones on the Casablanca Stock Exchange by 44 to 12 and 6 ended unchanged.

Crude oil for March delivery was up 0.40% or 0.26 to $65.68 a barrel. Elsewhere in commodities trading, Brent oil for delivery in April rose 0.40% or 0.28 to hit $69.87 a barrel, while the April Gold Futures contract fell 6.12% or 327.51 to trade at $5,027.29 a troy ounce.

EUR/MAD was up 0.18% to 10.84, while USD/MAD rose 0.64% to 9.10.

The US Dollar Index Futures was up 0.49% at 96.61.

Investing.com -- Raymond James upgraded SanDisk Corporation (NASDAQ:SNDK) to Outperform from Market Perform and with a $725 price target, saying the company remains positioned for further upside despite shares rising more than sixteenfold since its spin-off from Western Digital a year ago.

The current data center and AI-driven storage cycle is distorting traditional forecasting, with Sandisk guiding to revenue upside of about 57% versus consensus and earnings more than double expectations.

Demand remains exceptionally strong and continues to build, while supply is tightening to the point that capacity could be effectively sold out for years, with little new supply expected in the near term.

This environment supports sustained pricing strength and marks a shift toward a more favorable outlook for NAND, not just DRAM.

Sandisk is a key beneficiary of longer-lived data center builds, with supply increasingly prioritized away from faster-turn consumer and edge markets.

In its quarterly results the company posted data center revenue jump 64% quarter on quarter and now accounting for about 15% of total sales.

Management expects growth to accelerate further as additional hyperscale and data center customers are qualified. Pricing was described as exceptionally strong, with contract prices changing materially within short timeframes, a trend management expects to continue into the March quarter.

Bit supply grew at a low single-digit pace in the quarter, but the transition to BiCS8 is expected to lift bit growth into the low- to mid-teens within existing capital spending plans. While cost reductions were limited to about 10% last quarter, Raymond James said management expects improvement ahead, even as higher-cost products often carry higher average selling prices.

RJ now expects earnings of $41.06, for fiscal 2026. It driven by continued data center momentum and margins nearly double year-ago levels.

The $725 target is based on an 8.4x multiple of projected fiscal 2027 non-GAAP earnings, in line with the current forward multiple.

Raymond James said further earnings revisions are likely as investors gain clarity on supply and pricing dynamics in what it described as an unprecedented market environment.

Investing.com -- Rocket Companies (NYSE:RKT) stock fell 12% Friday after U.S. President Donald Trump nominated Kevin Warsh as the next Federal Reserve chairman and following disappointing results from PennyMac Financial Services (NYSE:PFSI).

The mortgage originator’s shares tumbled alongside other companies in the sector, with loanDepot (NYSE:LDI) dropping 4% and UWM Holdings (NYSE:UWMC) declining 9% during the session. The sector-wide sell-off came as investors processed Trump’s announcement that Warsh would replace current Fed Chair Jerome Powell when his term ends in May 2026.

PennyMac Financial Services, which provides mortgage services similar to Rocket, reported that its Servicing segment net revenue fell 22% YoY to $153.9 million, significantly below analyst estimates of $233.3 million. The segment handles loan servicing for newly originated loans under holding for sale and loans serviced for others.

The double blow of potential changes in monetary policy leadership and weak industry results appeared to weigh heavily on investor sentiment toward mortgage companies, which are particularly sensitive to interest rate expectations and housing market conditions.

Warsh, a former Federal Reserve governor who served during the 2008 financial crisis, has previously advocated for monetary policy normalization, raising questions about the future direction of interest rates and their impact on the mortgage industry.

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