HPE falls after Morgan Stanley downgrade and PT cut

**Stock in AI server maker Hewlett Packard Enterprise HPE fall 2.4% to $22.29 premarket, after Morgan Stanley downgraded its rating to “equal weight” from “overweight”

**The investment bank also cuts HPE’s PT from $28 to $25.

**MS cites an “unprecedented memory cycle” with NAND and DRAM prices rising 50% and four-fold, respectively, in the last six months.

** The investment bank says the memory ‘supercycle’ increasingly poses a downside risk to hardware OEMs’ earnings heading into 2026.

** “We believe margin pressure from a stronger AI server mix, coupled with memory cost inflation, will limit multiple expansion and positive estimate revisions,” MS says.

**MS says the cycle is a misalignment between input cost inflation and tepid non-AI hardware demand trends.

**MS cuts HPE’s FY26 gross margin forecast by 260 basis points to 32.9%

** 10 of 22 brokerages rate the stock as a “buy” or higher, 10 as a “hold”; your average PT is $26 – LSEG data

** As of last close, HPE is up 6.93% year-to-date versus the S&P 500 Technology Hardware, Storage &…