Nasdaq (NDAQ) is well-positioned for sustained earnings growth, driven by a recovering capital markets environment and long-term catalysts such as AI, tokenization, extended-hours trading and market technology that continue to expand its recurring revenue base, Morgan Stanley said in a Friday note.
Analysts cited strong Verafin momentum, record index assets under management and ETF inflows, a broader IPO market recovery and rising AI product adoption as key drivers supporting Nasdaq's recurring revenue growth into 2027.
Meanwhile, Nasdaq remains on track to launch 23/5 equities trading and event options later this year, the note said, adding that tokenization and AI initiatives are also expected to expand the company's long-term market opportunity.
The company also said crypto perpetual futures pose minimal revenue risk, with potential overlap accounting for less than 1% of revenue, according to the note.
Morgan Stanley raised its 2026 and 2027 earnings estimates after Nasdaq's stronger-than-expected Q2 results, forecasting Solutions organic revenue growth of 14.9% in 2026 and 10.8% in 2027, above the company's medium-term target of 9% to 12%.
Morgan Stanley maintained its overweight rating on the stock and raised its price target to $120 from $112.
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