Morgan Stanley Turns More Bullish on IT Hardware as ‘Chipflation’ Drives Faster Spending

Morgan Stanley has become more bullish on the U.S. IT hardware sector, upgrading its industry view to In-Line from Cautious, citing that rising memory-chip costs (chipflation) are accelerating corporate spending on infrastructure rather than delaying it. The firm upgraded Hewlett Packard Enterprise and Pure Storage to Overweight and NetApp to Equal-weight, driven by increased demand for servers and storage due to both "Fear of Missing Procurement" and AI-related infrastructure expansion. While tactical, this positive outlook acknowledges potential cyclical risks, particularly in 2027 as accelerated purchasing might normalize.