Morgan Stanley has identified five Japanese electronics manufacturers as preferred exposures to ongoing capital spending in artificial intelligence infrastructure, assigning all five stocks above-average ratings.
The bank’s top choice is Murata Manufacturing, citing the company’s dominant position in multi-layer ceramic capacitors targeted at AI and data center capex. Morgan Stanley expects margin expansion as Murata shifts toward higher-value capacitors and RF modules recover from years of underperformance. The firm also highlights Murata’s structural cost advantage over Korean and Taiwanese competitors, reinforced by a weak yen.
Ibiden is framed as a pure play on AI infrastructure build-out, with Morgan Stanley noting the company’s near-monopoly in advanced ABF package substrates for NVIDIA’s GPU roadmap. The bank argues that technological leadership is difficult to replicate, as each new chip generation requires larger and more complex substrates. Morgan Stanley also points to Ibiden’s first-quarter fiscal 2026 results, which exceeded analyst estimates in both revenue and earnings, alongside an upward revision to full-year guidance.
TDK is described as a portfolio in transition, with the bank noting the company’s progress in exiting or transferring lower-return legacy businesses such as HDD heads and certain passive components. Morgan Stanley highlights TDK’s rechargeable battery segment—particularly high-value silicon anode applications and data center backup—as the new earnings driver. The firm cites TDK’s record first-quarter fiscal 2027 results, driven by strong demand from AI data centers and smartphones.
Hirose Electric is positioned for steady, high-margin growth, supported by connectors for general industrial equipment and AI server infrastructure. Morgan Stanley emphasizes Hirose’s semi-fabless model and disciplined execution, with the investment thesis centered on continuous new project wins.
Niterra is characterized by diversification and market share gains, leveraging a stable cash base from spark plugs and exhaust gas sensors while expanding into electrostatic chuck components for semiconductor equipment.
Morgan Stanley’s recommendations follow its broader thesis on structural demand for AI-related components, with the bank highlighting the five stocks as beneficiaries of ongoing spending growth in AI infrastructure and improving business models across the industry.
