Is it safe to buy now or is this just a 'dead cat bounce'? Morgan Stanley's stock chief says you should sell any rallies — but here are 3 stocks the big bank still likes

Wilson’s team does not consider recent bank failures to be “random or idiosyncratic.” Instead, the events serve as “one more supporting factor” for the team’s negative earnings growth outlook.

The U.S. Federal Reserve has raised interest rates aggressively to tame inflation. And that does not bode well for the bottom line.

“In short, Fed policy is starting to bite, and it's unlikely to reverse even if the Fed were to pause its rate hikes or quantitative tightening — i.e., the die is cast for further earnings disappointments relative to consensus and company expectations.”

Still, despite the gloomy outlook, Morgan Stanley sees upside in quite a few stocks. Here’s a look at three that it finds particularly attractive.

Apple

Apple (AAPL) is a tech behemoth.

In the latest earnings conference call, management revealed that the company’s active installed base has surpassed two billion devices.

While competitors offer cheaper devices, millions of users don’t want to live outside of the Apple ecosystem. The ecosystem acts as an economic moat, allowing the company to earn oversized profits.

The market likes that: over the past five years, Apple shares have surged more than 230%.

Morgan Stanley analyst Erik Woodring sees more upside ahead for the stock. The analyst has an ‘overweight’ rating on Apple and a price target of $180 — around 19% above the current levels.

Snowflake

Many consider big data to be the next big thing. And that’s where Snowflake (SNOW) shines.

The cloud-based data warehousing company, founded in 2012, serves thousands of customers across a wide range of industries, including 573 of the Forbes Global 2000 companies.

Momentum is strong in Snowflake’s business. In the three months ended Jan. 31, revenue surged 53% year over year to $589.0 million. Notably, net revenue retention rate clocked in at a solid 158%.

The company continued to score large customer wins. It now has 330 customers with trailing 12-month product revenue of more than $1 million, compared to 184 such customers a year ago.