Nasdaq's (NDAQ) record FinTech growth, expanding artificial intelligence monetization and strong "index momentum" reinforce confidence in durable double-digit "Solutions" growth and further multiple expansion, Morgan Stanley said in a report Friday.
FinTech annual recurring revenue rose a record 18% in Q3, supported by improving enterprise "sales execution," cloud migrations and cross-selling.
Cloud represented 85% of FinTech ACV bookings, with migrations typically generating about a 1.5-times uplift, the report said.
Agentic AI adoption is also beginning to translate into "paid monetization," with more than 850 Verafin users using its Agentic AI Workforce and more than 70 clients signed to paid contracts.
About 25% of year-to-date eVestment bookings were tied to AI use cases, according to the report.
The firm pointed to tokenization and extended trading hours as factors that could extend Nasdaq's "growth runway."
The firm raised its 2027 and 2028 earnings per share estimates to $4.70 and $5.37, respectively, and forecast about a 10% revenue compound annual growth rate and 14% EPS CAGR through 2028, according to the report.
Morgan Stanley reiterated an overweight rating on Nasdaq and raised its price target to $132 from $118.
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