According to Morgan Stanley, demand is growing for AI-enabled companies such as data centers, power generators, and grid operators, with many Asian companies standing out as promising options. The Wall Street bank estimates that an additional gigawatt of potential power is being underwritten as these data centers expand, with “$50 billion in AI/DC investments committed.” [data center] “We see upside potential for power generation companies and grid operators in the region amid active investment,” Morgan Stanley analysts wrote in a June 2 research note. Below are three stocks on Morgan Stanley's list that stand out as having the most upside potential, according to FactSet consensus price targets. Top Stocks Morgan Stanley's bullish stance on Tenaga Nasional follows Google's announcement that it will invest $2 billion to develop a data center and cloud hub in Malaysia. “This will help drive upside potential for the company,” the bank said in a June 2 research note. [around] “The investment will support 350 megawatts of electricity demand and should bolster investor confidence in Tenaga Nasional, Malaysia's sole power transmission operator,” the analysts said. Tenaga is listed on Bursa Malaysia and trades as ADRs in the United States. Tenaga shares are also included in the iShares MSCI Malaysia ETF (6.7% weighting) and Global X FTSE Southeast Asia ETF (2.3%). Analysts surveyed by FactSet have a price target of 14.62 ringgits for the stock, which could see it rise by about 6%. In Singapore, Morgan Stanley analysts see potential for conglomerates such as Keppel and telecommunications operator Singapore Telecommunications, given the country's tight power market and plans for at least 500 megawatts of new data centers. Both are listed on the Singapore Exchange. Keppel has ADRs in the United States and Singapore Telecommunications is traded over-the-counter. Keppel shares are also included in the iShares MSCI Singapore ETF (4.4% weighting) and the Global X FTSE Southeast Asia ETF (1.6%). Analysts see potential upside of about 26% and 22% in Keppel and Singapore Telecommunications, respectively, according to FactSet. — CNBC's Michael Bloom contributed to this report.
