Morgan Stanley: Global IT Hardware—AI and Chip Inflation Twin Tailwinds, Still Time to Position
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Key Views
- End-market preference: storage (most durable) over servers over PCs; PCs expected to decline in 2H 2026–2027, servers in 2027–2028.
- Median EPS estimates across covered US and Asia hardware OEMs sit 8% above consensus for CY26 and 11% for CY27.
- HPE and P (Everpure) upgraded to Overweight; NetApp raised to In-Line (target $137→$173); Teradata cut to In-Line (target $35→$29).
Outlook
Enterprise infrastructure spending should stay strong through 2026 into 2027; most CIOs expect hardware budgets flat or down by end-2028, with PC budgets at risk first (~70% of CIOs see flat/lower by 2026–2027).
Recommended Securities
Top picks: Seagate (STX) in the US and Wiwynn (6669.TW, Overweight) in Greater China. Most favored enterprise hardware names: HPE, P (P.N, target $108), SNX in the US; Lenovo (0992.HK, Overweight, HK$29) in Asia. Acer (2353.TW) remains Underweight with target raised to NT$23.5; Asus to NT$700.