IT hardware slides after Morgan Stanley flags slowing enterprise demand

U.S. IT hardware stocks slide after Morgan Stanley cut its industry view to "Cautious" from "In‑Line"

Broker said "perfect storm" of slowing enterprise demand, rising input costs and rich valuations is pushing it to more defensive stance into 2026

MS downgraded NetApp NTAP.O and Logitech LOGN.S, LOGI.O to underweight and cut CDW CDW.O to equal‑weight, while also lowering earnings estimates across much of its enterprise hardware coverage

NTAP shares fell ~5% after the broker cut its price target to $89 from $117, warning that higher NAND costs and weaker storage spending could hurt profits

LOGN down 6%, CDW down 2.1%

MS now expects 1% year‑on‑year hardware spending growth in 2026, the weakest non‑COVID reading in 15 years, based on its latest CIO survey

According to broker's survey, 30%–60% of customers are expected to cut PC, server and storage spending if OEMs raise prices to offset component cost inflation

Broker flagged hardware sector trading at around 20x forward earnings, near historic highs and on what it described as near‑peak profit expectations