Morgan Stanley report: Traditional server revenue grows 87% as storage cycle remains early

A Morgan Stanley IT hardware report indicates that traditional server revenue grew 87% year-over-year in the second quarter, with storage up 34% and PC revenue up 14%. The firm notes that while enterprise hardware spending is strong, market valuations for many hardware stocks have compressed post-earnings. Morgan Stanley identifies storage as being in the early stages of an upward cycle, while server cycles are further along and PC demand is deteriorating. The firm maintains a preference for Pure Storage (P) and SYNNEX (SNX).