Morgan Stanley Downgrades NetApp, Logitech, and CDW as Hardware Budgets Hit 15-Year Low
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Source: seekingalpha
- Declining Hardware Budgets: Morgan Stanley's survey indicates that enterprises expect only 1% growth in hardware budgets for 2026, a 60bps decline from Q3 2025, reflecting caution towards the macroeconomic environment and potentially leading to revenue declines for related IT companies.
- NetApp Downgrade: NetApp's rating was downgraded from Equal-weight to Underweight, with its price target reduced from $117 to $89, highlighting risks from NAND price inflation that could adversely affect future performance in its storage solutions.
- Logitech's Dim Outlook: Logitech's rating was also downgraded to Underweight, with its price target lowered from $107 to $89, as approximately 80% of its revenue is closely tied to notebook and gaming PC shipments, suggesting potential sales declines due to weak market demand.
- CDW Revenue Risks: CDW's rating was downgraded to Equal-weight, with its price target cut from $177 to $141, as over 40% of its revenue comes from PC, server, and storage sales, indicating that reduced hardware budgets will directly impact its performance.
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Analyst Views on CDW
Wall Street analysts forecast CDW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CDW is 177.14 USD with a low forecast of 148.00 USD and a high forecast of 200.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
5 Buy
3 Hold
0 Sell
Moderate Buy
Current: 124.720
Low
148.00
Averages
177.14
High
200.00
Current: 124.720
Low
148.00
Averages
177.14
High
200.00
About CDW
CDW Corporation is a multi-brand provider of information technology (IT) solutions to business, government, education and healthcare customers in the United States, the United Kingdom and Canada. The Company’s array of offerings ranges from discrete hardware and software products to integrated IT solutions and services that include on-premises and cloud capabilities across hybrid infrastructure, digital experience and security. The Company operates through three segments: Corporate, Small Business and Public. The Corporate segment primarily serves United States private sector business customers. The Small Business segment primarily serves United States private sector business customers. The Public segment comprises government agencies and education and healthcare institutions in the United States. The Company’s solutions are delivered in physical, virtual and cloud-based environments. The Company provides integrated IT solutions in more than 150 countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Morgan Stanley Downgrades NetApp, Logitech, and CDW as Hardware Budgets Hit 15-Year Low
- Declining Hardware Budgets: Morgan Stanley's survey indicates that enterprises expect only 1% growth in hardware budgets for 2026, a 60bps decline from Q3 2025, reflecting caution towards the macroeconomic environment and potentially leading to revenue declines for related IT companies.
- NetApp Downgrade: NetApp's rating was downgraded from Equal-weight to Underweight, with its price target reduced from $117 to $89, highlighting risks from NAND price inflation that could adversely affect future performance in its storage solutions.
- Logitech's Dim Outlook: Logitech's rating was also downgraded to Underweight, with its price target lowered from $107 to $89, as approximately 80% of its revenue is closely tied to notebook and gaming PC shipments, suggesting potential sales declines due to weak market demand.
- CDW Revenue Risks: CDW's rating was downgraded to Equal-weight, with its price target cut from $177 to $141, as over 40% of its revenue comes from PC, server, and storage sales, indicating that reduced hardware budgets will directly impact its performance.
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GSK Acquires Rapt Therapeutics for $2.2 Billion
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- Product Development Rights: The acquisition grants GSK global rights (excluding Greater China) to Rapt's ozureprubart, currently in phase IIb clinical trials for food allergy prophylaxis, which is expected to yield long-term benefits for GSK.
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- Market Challenges: Morgan Stanley downgraded Logitech, NetApp, and CDW, warning of a “perfect storm” for IT hardware as corporate spending is expected to drop to its lowest level in 15 years, potentially leading to a cyclical downturn in hardware performance affecting these companies.
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