Morgan Stanley thinks Varonis Systems could be in for major gains thanks to artificial intelligence. The firm upgraded the software stock to overweight from equal weight in a Monday note. Its bull case sees Varonis rallying to $62. That implies upside of 102% from Friday’s close. Varonis provides security software for unstructured data vulnerable to cyber attacks. Analyst Hamza Fodderwala said the growth of generative AI will help the drive company growth, which investors may be overlooking. “[I]f Gen AI tailwinds become more apparent, we see the stock potentially doubling from here in our $62 bull case … closer to higher growth SaaS and Security peers,” Fodderwala. “With the stock trading at a discount to Security peers and precedent M & A, we view VRNS as one of the best risk-rewards in our software coverage universe.” The analyst added that Varonis’ software as a service (SaaS) platform coupled with normalizing demand also underpinned the upgrade, and will serve to “come together to drive an idiosyncratic inflection in business fundamentals.” Fodderwala also raised his base-case price target to $39 from $34, which implies around 28% upside over the next 12 months. Varonis has added more than 27% in 2023. VRNS YTD mountain Varonis Systems stock. — CNBC’s Michael Bloom contributed to this report.