Morgan Stanley said demand for artificial intelligence enablers such as data centers, power producers and grid operators is rising, with many Asian companies standing out as potential players. The Wall Street bank estimates that another 1 gigawatt of potential power is already “underwritten as these data centers expand.” “We are committed to investing $50 billion in AI/DC (data centers) and we see development potential for power stations and grid operators in the region,” Morgan Stanley analysts wrote in a June 2 research note. Here are three stocks on Morgan Stanley’s list that stand out for their massive upside potential, based on FactSet consensus price targets. Before Morgan Stanley was optimistic about Tenaga Nasional, Google announced that it would invest US$2 billion to develop data centers and cloud centers in Malaysia. “We estimate this will add around 350MW of electricity demand and should bolster investor confidence in Malaysia’s sole grid operator Tenaga Nasional Bhd,” the analysts said. Tenaga is listed on Bursa Malaysia under a U.S. ADR trade. Analysts polled by FactSet have a target price of RM14.62 for the stock, with potential upside of about 6%. Across the Causeway in Singapore, analysts at Morgan Stanley see potential in conglomerates such as Keppel and telecoms operator Singtel as the country’s electricity market tightens and plans to build at least 500 megawatts of potential new data centers. Both stocks are listed on the Singapore Exchange. Keppel owns American depositary receipts in U.S. and Singtel over-the-counter transactions. Keppel shares are also included in the iShares MSCI Singapore ETF (weighting 4.4%) and the Global X FTSE Southeast Asia ETF (weighting 1.6%). space. —CNBC’s Michael Bloom contributed to this report.
