IT hardware slides after Morgan Stanley flags slowing enterprise demand

Logitech International SA

20/01/2026 10:11

** 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

(Reporting by Rashika Singh in Bengaluru)

((Rashika.Singh@thomsonreuters.com;))