Morgan Stanley sees Panasonic as one of the most promising stocks in the Japanese technology sector, with particular upside potential from its growing data center battery business.
• Morgan Stanley rates Panasonic Holdings as a top pick with an Overweight recommendation
• The central growth driver is the battery business for data centers
• Panasonic is considering converting parts of its US plant in Kansas to data center applications
Data centers as a central growth driver
Morgan Stanley analyst Kazuo Yoshikawa rates Panasonic as a top pick in consumer electronics and semiconductors, with an Overweight rating and a price target of 2,500 yen. According to a report from Investing.com, the investment bank sees significant upside potential in the company, driven by strategic realignment and positioning in key next-generation markets. According to the analysis, the comparatively muted price development of Panasonic shares in 2025 primarily reflects the uncertainty in the car battery business.
However, Yoshikawa sees the real growth story in the area of industrial and consumer batteries with a focus on data centers. According to Investing.com, a central element of the bullish view is Panasonic’s roadmap for so-called battery backup units (BBUs), which are used in data centers to provide emergency power. Over 80 percent of the forecast BBU sales up to the March 2029 financial year are already contractually secured. Planned product launches include integrated CBU racks beginning in fiscal March 2027 and high-voltage BBUs beginning in fiscal March 2029. Morgan Stanley has increased the EBITDA multiple for its industrial and consumer battery business from nine times to approximately 11 times, reflecting stronger growth prospects in the data center segment.
Strategic restructuring of battery production
Meanwhile, Panasonic is making a strategic adjustment to its manufacturing capacity. As Reuters reported on February 4, 2026, the company is exploring partially converting its battery production at its US plant in Kansas to data center applications. Panasonic also plans to build a second factory for data center battery modules in Mexico. According to Panasonic’s quarterly report, the energy division’s operating profit fell 3.5 percent year-on-year to 40.5 billion yen in the fiscal third quarter, as cooling demand for electric vehicles in North America partially offset stronger demand for energy storage systems for data centers.
For the full year, Panasonic cut its group-wide operating profit forecast by 9.4 percent to 290 billion yen, due, among other things, to restructuring costs and a write-down related to the planned sale of the Spanish automotive parts division Ficosa. Panasonic posted an operating loss of 7.2 billion yen in the October-December 2025 quarter, its first quarterly loss in nearly a decade. The forecast for the energy division, however, was maintained with an operating profit of 111 billion yen.
Semiconductors and industrial automation as further pillars
In addition to the battery business, Morgan Stanley also sees Panasonic as an underrated winner in the semiconductor ecosystem. According to Investing.com, the areas of power semiconductors and components for industrial automation are particularly showing above-average profit growth. The analysts emphasize that the structural reforms within the group are increasingly bearing fruit and are sustainably improving operating margins. Panasonic competes in the energy storage sector with the Chinese market leader CATL and the South Korean manufacturer LG Energy Solution. The latter also reported solid growth in energy storage systems in its most recent earnings release and plans to expand global production capacity in this segment to over 60 gigawatt hours in the current fiscal year.
Morgan Stanley sees the stock’s risk-reward ratio as attractive. Yoshikawa argues that the perception of Panasonic as a beneficiary of the AI and data center wave is likely to increase as the energy segment’s contribution to growth becomes more clearly visible. This could lead to a higher valuation of the stock. The current assessment does not yet fully reflect the long-term earnings potential of AI-supported production processes and the leadership position in the area of green energy infrastructure.
Dominik Maier, editorial team at finanzen.net
By the way: Morgan Stanley and other US stocks can even be traded on finanzen.net ZERO until 11 p.m. (without order fees, plus spreads). Open a depot now for free and secure a new customer bonus!
Selected leverage products on CATL (Contemporary Amperex Technology)
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on CATL (Contemporary Amperex Technology)
The leverage must be between 2 and 20
Advertising
