Morgan Stanley says these 6 stocks are much cheaper alternatives to Big Tech

Published Mon, Jun 28 202110:30 PM EDTUpdated Mon, Jun 28 202110:55 PM EDT

When it comes to technology, Morgan Stanley says it's "Europe's time to shine." Its analysts have named their six favorite stocks across fields like electric cars, drones, 3D-printing and sustainable technologies. The analysts and strategists, led by Edward Stanley, said many of Europe's most innovative companies play a crucial role in so-called "innovation stacks" that underpin projects like NASA's space helicopter. "We believe there are six companies whose world-class innovation stacks give them clear long-term advantages over regional and global peers," they wrote in the note dated June 17. Here are the stocks, all rated overweight by the bank: ASML — With a market cap of around 240 billion euros ($286 billion), Dutch firm ASML is one of Europe's most valuable tech firms. The company makes lithography equipment that brings together high-tech hardware and software to control the chip manufacturing process down to the nanometer level. "The lithography tools that ASML produces are key enablers for the continued shrinkage of integrated circuits," the analysts wrote. ASML currently has around 90% of the world's lithography market and Morgan Stanley thinks demand for its equipment will surge as chips get smaller. The bank has a target share price of 590 euros. Dassault Systemes — French industrial software maker Dassault Systems is in the "early stages of a major product cycle" and is about to launch new products in new industries, according to Morgan Stanley. The firm, which has a market cap of around 50 billion euros, is "well positioned" to address the digitalization of the manufacturing industry and the healthcare industry following its acquisition of Medidata, the analysts said. "We believe management's long-term/visionary approach to positioning the company for the future through internal R & D and strategic M & A further cements its position as an innovation leader," they added. Morgan Stanley's target price for the shares is 187 euros. Evolution Gaming — Founded in Sweden in 2006, Evolution is a casino game developer that is focused on the "live" vertical. The company develops, produces and licenses games that are then hosted on its customers' sites. "As the dominant gam