IT hardware spending to improve in 2025

Investing.com -- IT hardware spending is set for a turnaround in 2025 after a dour 2024, driven by a recovery in both enterprise and consumer markets, according to a Morgan Stanley (NYSE: MS) note.

Enterprise hardware budgets are expected to grow by 3% year-on-year, surpassing the 1.6% growth seen in 2024, with investments in PCs, servers, and storage leading the rebound.

Spending on generative AI infrastructure is emerging as a key growth driver, with 77% of chief information officers planning to increase hardware spending over the next three years.

On the consumer side, while spending remains under pressure, there are signs of recovery. Morgan Stanley’s survey highlighted the least negative consumer electronics spending outlook in over three years, indicating potential stabilization in 2025.

However, risks remain. Valuation concerns and macroeconomic uncertainties, including interest rates and tariffs, continue to weigh on the sector. Despite these challenges, Morgan Stanley maintains a cautiously optimistic view, emphasizing cyclical enterprise stocks over consumer hardware.

Apple Inc (NASDAQ: AAPL) remains a top pick in the sector, while companies like Dell Technologies Inc (NYSE: DELL) and Seagate Technology are also well-positioned to capitalize on the improving landscape.

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