Morgan Stanley has named Union Pacific (UNP) as a likely winner from the next phase of artificial intelligence (AI) adoption. In a September 2026 report, the bank argued that companies which use AI to boost productivity could beat the firms that supply the technology. Morgan Stanley says UNP can cut costs and get more from its network. Automation could shrink the time to unload 33,000 railroad ties from about 10 days to six hours. UNP is the largest US freight railroad, covering 23 states. It keeps 40.9% of revenue as operating profit. Its proposed $85 billion purchase of Norfolk Southern faces a regulatory timetable running into the second half of 2027. A 64% jump in average fuel price in Q3 2026 also hurt its operating ratio by about 140 basis points.

Morgan Stanley kept its Overweight rating and $192 price target on Shopify, saying it would buy the stock's pullback. It said the dip reflects high expectations, not weaker merchant demand. In the third quarter of fiscal 2026, Shopify handled $119.15 billion in sales, up 29.5%. Revenue rose 32% to $3.74 billion, and free cash flow was $816 million, a 22% margin. The stock fell from $180.88 on October 12 to $135.65 on November 3, then recovered to above $153.90. Shopify expects low-30s revenue growth in the fourth quarter, ahead of Street forecasts. The bank flags costly international expansion, price competition in payments, and a macro slowdown as risks. It expects operating leverage to resume in 2027.

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