Morgan Stanley: Traditional Server Revenue Up 87%, Storage Still in Early Cycle

Morgan Stanley notes that the memory sector remains in the early stages of an upcycle, while the server cycle is lagging further behind and most PC-related opportunities have already passed. Server profit margins are stacking up at unprecedented levels; as long as memory prices continue to rise and supply remains constrained, this trend will not dissipate quickly. HPQ faces dual headwinds regarding PC demand and margins, with Morgan Stanley forecasting a 2% decline in FY27 revenue and a 16% drop in earnings per share.