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HPE Stock Surges on AI Data Center Boom
10 Aug
Summary
- Morgan Stanley upgrades HPE, citing strong hardware spending.
- AI data centers are sustaining a long hardware upcycle.
- Enterprises accelerate purchases due to 'Fear of Missing Procurement'.
Hewlett Packard Enterprise (HPE) is set to benefit from sustained strong spending in the hardware sector. Morgan Stanley recently upgraded its rating on the company, indicating a positive outlook despite rising memory and storage prices.
The bank's analyst noted that hardware stocks have seen substantial gains since early 2025, with HPE shares experiencing a significant surge of approximately 149% over the same period. This upward trend is expected to continue.
Morgan Stanley believes that major infrastructure players like HPE have further room for growth. This optimism stems from the ongoing boom in artificial intelligence data centers, which is fueling a longer, albeit cyclical, upcycle in hardware infrastructure.
An increasing number of enterprises are viewing memory chip price inflation as a long-term structural challenge. Rather than delay purchases, companies are prioritizing and accelerating the acquisition of PCs, servers, and storage arrays to secure better pricing and mitigate supply shortages, a trend referred to as 'Fear of Missing Procurement'. This aligns with a general consensus on Wall Street, with a majority of analysts maintaining buy or strong buy ratings on HPE stock.
