[Morgan Stanley Research Report Analyzes Enterprise Hardware Stocks, Traditional Server Revenue Grows 87%] Morgan Stanley's research report dated September 21, 2026, indicates that traditional server revenue grew 87% year-over-year in the second quarter, storage grew 34%, and PCs grew 14%. Among 8 enterprise hardware stocks, 6 saw valuation multiples decline post-earnings compared to pre-earnings, with average upward revisions of 12% for next fiscal year's earnings per share. Morgan Stanley's top picks are P and SNX, followed by HPE; Dell remains neutral, and HPQ is downgraded to underweight. Storage is in the early stages of an upward cycle, servers are in the late cycle, and most PC opportunities have already passed. Server profit margins are stacking at unprecedented levels, supported by rising memory prices and constrained supply. HPQ faces pressure from declining PC demand and profit margins, with Morgan Stanley projecting its FY27 revenue to decrease by 2% and earnings per share to drop by 16%.