European equity investors want to broaden their holdings beyond artificial intelligence-linked stocks, Morgan Stanley analysts write. Investors should look to broaden into stocks that aren't dependent on AI and those which provide income in order to reduce volatility in their portfolios, the analysts say. In addition, investors should hold stocks with improving fundamental themes, such as those benefiting from the reopening of the Strait of Hormuz, they say. "Europe offers plenty of scope for diversification, improving fundamentals and structurally rising stock dispersion." U.K. defense group Rolls-Royce and British Airways-owner IAG are among stocks the analyst think will benefit from the strait reopening. (josephmichael.stonor@wsj.com)