Morgan Stanley Flags 15 Earnings Movers to Watch: Magnificent 7 Still Driving S&P 500 Growth

Morgan Stanley anticipates a relatively “normal” earnings beat rate for Q2 2025, but beneath the surface, a deeper divergence is playing out. The firm forecasts S&P 500 earnings per share (EPS) growth of 5% year-over-year and revenue growth of 4%, but this growth is overwhelmingly concentrated in the Magnificent 7, with expected earnings growth of 14% compared to a 3% decline for the other 493 constituents.

This skew underscores the continuing concentration of earnings momentum in mega-cap tech, but Morgan Stanley also highlights 15 stocks they believe are poised for notable earnings-driven moves—13 to the upside, and 2 to the downside.

Macro Risk Factors Shaping Q2 Earnings Season

Morgan Stanley's outlook is also tempered by key uncertainties:

• The impact of tariffs and whether companies have successfully passed costs through to end-consumers

• Potential downward revisions for Q3/Q4 2025 earnings

• Diverging pricing power across income groups, especially in consumer-facing sectors

These crosscurrents increase the importance of analyzing not just revenue and profit growth, but also margin sustainability and forward guidance.

For analysts and financial modelers, now is the right time to prepare for earnings volatility using real-time and historical data. You can access current earnings dates and reports with the Earnings Calendar API, and analyze past performance with the Earnings Historical API.

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13 Stocks With Upside Potential, According to Morgan Stanley

Here's a breakdown of the upside names and what's driving Morgan Stanley's positive outlook:

1. Argenx (NASDAQ:ARGX)

Catalyst: Strong sales momentum for Vyvgart and pipeline updates
Morgan Stanley highlights continued commercial traction in myasthenia gravis (MG) and chronic inflammatory demyelinating polyneuropathy (CIDP). The firm also points to a potential upside from Phase 3 data in seronegative MG.

2. Atlassian (NASDAQ:TEAM)

Catalyst: Resilient demand, compelling guidance potential
Despite macro headwinds, channel feedback suggests stability. The firm expects FY26 revenue guidance of 18%, which could beat lowered expectations.

3. Chewy (NYSE:CHWY)

Catalyst: Strong web/app engagement, fulfillment efficiency
With rising traffic and improving margins, Chewy is Morgan Stanley's “top pick in SMID eCommerce”, driven by accelerating market share and cost leverage.

4. CVS Health (NYSE:CVS)

Catalyst: Less exposure to Medicaid and exchanges
Analysts believe maintaining the 2025 EPS target could support the stock, with Medicare Advantage trends in line with expectations.

5. DraftKings (NASDAQ:DKNG)

Catalyst: Strong engagement, improving unit economics
Expected to benefit from disciplined marketing and product innovation ahead of NFL seasonality.

6. Eaton (NYSE:ETN)

Catalyst: Positive exposure to electrification and infrastructure themes
Seen as a multi-cycle compounder benefiting from U.S. energy transition and grid modernization.

7. Eli Lilly (NYSE:LLY)

Catalyst: Ongoing strength in Mounjaro sales and GLP-1 class
Pipeline momentum and global obesity treatment trends remain supportive.

8. F5 (NASDAQ:FFIV)

Catalyst: Earnings reset behind, cloud migration tailwinds
Analysts believe most negative expectations are priced in, and Q2 may surprise to the upside.

9. NVIDIA (NASDAQ:NVDA)

Catalyst: Strong Blackwell demand, China shipments upside
Rack-scale shipments are accelerating, and easing restrictions on H20 chips could unlock further upside. Morgan Stanley expects a revenue beat in the October quarter.

10. Omada Health Inc (NASDAQ:OMDA)

Catalyst: Digital health scale-up story
Positioned to benefit from employer adoption of preventive care and outcomes-based health models.

11. Southwest Airlines (NYSE:LUV)

Catalyst: Undervalued among peers
Any sign of cost stabilization or positive load factor data could trigger upside moves.

12. Valley National Bancorp (NASDAQ:VLY)

Catalyst: Relative stability among regional banks
Seen as less exposed to commercial real estate risk vs. peers.

13. Western Digital (NASDAQ:WDC)

Catalyst: Memory market recovery
Morgan Stanley sees cyclical tailwinds as ASPs (average selling prices) and volumes recover.

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2 Stocks With Downside Risk

1. National Storage Affiliates (NYSE:NSA)

Risk: Operational softness not yet priced in
Morgan Stanley did not elaborate in detail, but self-storage REITs may be facing volume and pricing pressure post-COVID.

2. Teradyne Inc (NASDAQ:TER)

Risk: Weak demand trends
Slower test equipment spending from semiconductor clients could lead to a revenue miss.

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Dashboard Tips: How to Track These Earnings Movers

For financial analysts building investor dashboards or watchlists, incorporating Earnings Calendar and Historical Earnings data from FMP provides a crucial edge. Here's how to apply them:

• Use the Earnings Calendar API to set alerts for upcoming earnings reports on key watchlist names.

• Plug into the Earnings Historical API to review YoY and QoQ trends, beat/miss ratios, and EPS/sales surprise history.

This allows you to separate reactive market noise from repeatable earnings patterns, especially in volatile sectors like tech, biotech, and consumer eCommerce.

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Final Thoughts

Morgan Stanley's earnings preview captures the bifurcated nature of this market: a handful of mega-cap leaders continue to power index-level growth, while the rest of the S&P 500 faces uneven margin and revenue challenges.

The 15 stocks highlighted offer a useful cross-section of sectors, from AI chips and biotech to consumer discretionary and regional banking. For professionals building earnings-based dashboards or strategies, integrating real-time and historical data will be critical this season.