United StatesArtificial Intelligence▲
Morgan Stanley upgrades IT hardware view on chipflation-driven demand
Morgan Stanley has upgraded its U.S. IT hardware industry view to In-Line from Cautious, citing accelerating infrastructure demand driven by memory chipflation. Analyst Erik Woodring said enterprises increasingly see chipflation as a multi-year structural headwind and are accelerating purchases of PCs, servers, and storage to lock in favorable prices, a dynamic he called Fear of Missing Procurement. The firm upgraded Hewlett Packard Enterprise and Pure Storage to Overweight and NetApp to Equal-weight, while downgrading Teradata. Morgan Stanley now prefers storage over servers over PCs and raised estimates across its OEM universe, sitting 9% to 12% above consensus on 2026 and 2027 EPS. However, the firm stressed the tailwinds are primarily cyclical and warned that hardware stocks, up over 100% since the start of 2025, trade at historically expensive levels, with the cycle potentially rolling over beginning in 2027.
About megatrends
Artificial Intelligence › AI Server OEM & System Integration ▲Demand
Cloud & Digital Infrastructure › Enterprise Data Storage Systems ▲Demand
Semiconductors › Memory — DRAM, NAND & HBM ▲Pricing
Artificial Intelligence › AI Tooling, Data & MLOps ▲Demand
HPE · Demand · Positive Upgraded to Overweight on accelerating infrastructure demand from chipflation-driven procurement.
PSTG · Demand · Positive Upgraded to Overweight, with preference for storage over servers on chipflation-driven demand.
NTAP · Demand · Positive Upgraded to Equal-weight, benefiting from accelerated storage purchases due to chipflation.
TDC · Demand · Negative Downgraded as Morgan Stanley prefers storage over servers, implying weaker demand for Teradata's offerings.