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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (25596)	8/21/2025 9:54:50 AM
From: Kirk ©	Read Replies (1) \| Respond to of 26422

HPE upgraded to Overweight on Juniper as hardware benefits from AI demand: Morgan Stanley Aug. 21, 2025 9:41 AM ET By: Brandon Evans, SA News Editor seekingalpha.com Hewlett Packard Enterprise (NYSE:HPE) was upgraded to Overweight from Neutral by Morgan Stanley due to its Juniper acquisition as enterprise hardware and storage stocks benefit from artificial intelligence demand. HPE shares climbed 3% during early market trading on Thursday. "Our thesis is straight-forward - with the closure of JNPR, we see 18% upside to FY26 Consensus EPS, with EPS growing to $2.70-3.00 in FY27, and believe that as the market comes to better understand nearly half of HPE's business is networking, inclusive of more AI exposure (JNPR in xAI cluster), HPE's multiple will re-rate above the current 8x multiple," said Morgan Stanley analysts, led by Erik Woodring, in an in-depth Thursday investor note. Morgan Stanley also increased its price target to $28 from $22. The investment firm also reiterated its Overweight rating on Dell (NYSE:DELL) and increased its price target on the stock to $144 from $135. "We continue to like DELL's long-term story — the company is the clear leading OEM for AI compute and is gaining share with key customers xAI and CoreWeave (CRWV), is back to gaining share in enterprise storage markets, is performing decently in traditional servers, and is in the middle innings of a company-wide cost efficiency program that we see driving 10%+ EPS growth over the next 3 years (vs. mgmt's stated goal of 8%+)," Woodring said. Morgan Stanley also initiated coverage on Pure Storage (NYSE:PSTG) and NetApp (NASDAQ:NTAP), giving both an Equal-weight rating and price targets of $60 and $115, respectively. "PSTG's differentiating attributes (performance, TCO, simplicity, all driven by Software) continue to create a competitive moat vs. enterprise storage peers and allow for consistent share gains, which we expect to persist into the future," Woodring said. "Additionally, the fact that PSTG is working with Meta Platforms (META) and CRWV shows they have a role to play in the hyperscale/AI data center." Morgan Stanley's most recent chief information officer survey showed enterprise hardware spending increased in the second quarter of 2025. However, aside from AI-focused hyperscalers, overall enterprise hardware spending might not demonstrate much growth in the quarters ahead. "Looking forward, we expect overall Hardware growth to slow in 3Q/4Q, with the slowdown likely to be most pronounced in PCs — where 1H benefitted from modest demand pull-forward and Windows 11 refreshes — and General Servers," Woodring said. "For Enterprise Storage, we are hearing mixed signals on 2H25/2026. On the positive side, we continue to hear about the potential for storage demand/growth to accelerate due to data center monetization needs as growing on-prem AI spending creates demand for faster, hotter, primarily flash storage." HPE plans to release its latest quarterly financial results on September 3. The consensus estimate calls for adjusted earnings per share of $0.41 on revenue of $8.88B.