Hewlett Packard Enterprise is poised to get a big boost from strong spending in hardware, which is showing no signs of slowing, even as memory and storage prices rise, according to Morgan Stanley. The bank upgraded its rating on the computer infrastructure play to overweight to equal-weight. However, it lowered its price target on shares to $69 from $71, suggesting about 30% upside from Friday’s close. “Admittedly, we have been on the wrong side of the enterprise hardware trade, previously believing that record component inflation would quickly stymie a recovery in hardware spending,” analyst Erik Woodring said Monday in a note to clients. “But our views are changing, and we are…upgrading HPE.” Woodring noted that hardware stocks are already up over 100% since the start of 2025. Hewlett Packard, meanwhile, has seen its shares jump roughly 149% over the same period. However, stocks of major infrastructure players, including Hewlett Packard, likely have more room to run as a boom in artificial intelligence data centers sustains a longer, but still cyclical, infrastructure upcycle, according to Morgan Stanley. “It’s increasingly clear enterprises are viewing memory ‘Chipflation’ as a multi-year structural headwind, and rather than delaying or deferring hardware purchases until pricing cools, enterprises are quickly prioritizing/accelerating purchases of PCs, servers and storage arrays to lock in the most favorable prices and limit supply shortages, aka the ‘Fear of Missing Procurement’,” Woodring wrote. Morgan Stanley’s call falls in line with consensus on Wall Street. Of the 23 analysts covering Hewlett Packard, 14 have a buy or strong buy on the stock, LSEG data shows. Shares have surged 156% over the past year and rose more than 5% in premarket trading Monday.
