By Navamya Acharya
Publication Date: 2025-11-17 07:14:00
Investing.com – Rising memory costs and weakening demand for non-AI hardware have led Morgan Stanley to cut ratings on several major technology hardware makers, including Dell Technologies, HP Inc. and Hewlett Packard Enterprise, as the brokerage warned of growing pressure on margins across the sector.
Analysts described the current environment as a “memory supercycle,” with NAND and DRAM spot prices rising between 50% and 300% in the past six months, adding that the sharp acceleration in component inflation is likely to weigh on earnings through 2026.
Morgan Stanley said hardware OEMs historically face gross margin compression between 6 and 12 months after memory costs start to rise, and expects an average decline of 60 basis points in global OEM margins in 2026, versus Wall Street forecasts calling for a slight expansion.
Dell and HP were identified as among those most exposed to rising DRAM and NAND prices due to their heavy reliance on memory-intensive PC and server products,…
