Hewlett Packard Enterprise (HPE) is expected to benefit significantly from ongoing strong demand for hardware, as highlighted by Morgan Stanley's recent upgrade of the company's stock rating from equal-weight to overweight.
Analyst Erik Woodring noted that despite previous concerns about inflation in component prices hindering hardware spending, there is now a clear trend of enterprises accelerating their purchases of PCs, servers, and storage arrays to avoid supply shortages.
This shift is partly driven by the fear of missing out on favorable pricing amid what Woodring describes as a multi-year structural headwind from memory 'Chipflation.' HPE's stock has surged approximately 149% since the beginning of 2025, and Morgan Stanley's revised price target of $69 suggests a potential upside of about 30% from its recent closing price.
The consensus among analysts is also positive, with 14 out of 23 recommending a buy or strong buy on HPE shares. The overall market sentiment indicates that major infrastructure players like HPE have further growth potential as the demand for AI data centers continues to support a cyclical upturn in the hardware sector