Morgan Stanley Says "Ignore The Noise... Focus On These Big Themes That Generate Huge Alpha"

By Stephen Byrd, Morgan Stanley thematic analyst

Focus on the Big Thematic Drivers

With the high churn of news flow on a range of market-moving issues, it can be easy to lose sight of the big Thematic drivers that we believe will continue to generate alpha. Our advice: Focus on the megatrends embedded in our 10 Thematic predictions, and tune out the day-to-day, news flow–driven volatility. The durable nature of our key themes — defense, as an example — cut through the day-to-day noise and continue to generate alpha. In 2025, our thematic stock categories on average outperformed MSCI World and the S&P 500 by 16% and 27%, respectively, and continue to outperform in 2026.