Morgan Stanley (MS) is Well Positioned to Benefit from AI Capital Raising

Morgan Stanley, a leading investment bank and wealth manager, played a significant role in the performance of Baron Financials ETF during the second quarter of 2026. The ETF, which includes financial stocks, saw an increase of 1.82% despite underperforming the broader market. Morgan Stanley's contribution to the fund's growth was 0.90%.

The bank's strong performance was driven by record revenue in Institutional Securities, record fee-based flows in Wealth Management, and a 27% return on tangible equity. Morgan Stanley raised its dividend by 15% and authorized a new share repurchase program of up to $20 billion. The company is seen as relatively well insulated from AI-related threats and is expected to benefit from the capital-raising required for AI infrastructure buildout.

Morgan Stanley is not currently among the 40 most popular stocks among hedge funds, but the fund retains a long-term conviction in the stock.