Morgan Stanley's latest value-added reseller checks show enterprise infrastructure spending remains strong but is diverging across hardware categories, with storage strengthening, servers staying well above historical levels, and PCs eroding. Analyst Erik Woodring said third-quarter enterprise hardware spending is tracking in line to slightly above expectations set 30 days ago, helped by large enterprise demand, healthy mid-market spending, and incremental improvement in the public sector. Storage demand is running ahead of prior expectations for the September quarter, with year-over-year growth expected to accelerate from the second quarter, and the reseller believes the momentum of recent quarters remains in the very early stages, potentially supporting a multi-year cycle. Server demand remains exceptionally strong, though the bank flagged fewer and smaller deals and longer sales cycles than a month ago, with the moderation most pronounced in financial services, but it does not read this as material deterioration. PCs saw the sharpest deterioration, with the reseller now expecting third-quarter growth near 6%, down from roughly 10% previously.
Dell Technologies IncStorage demand strengthening and servers strong, though PCs deteriorating; overall enterprise hardware spending in line to slightly above expectations.
Sandisk CorpStorage demand running ahead of expectations, supporting a multi-year cycle, which is positive for Sandisk's products.
Morgan Stanley