U.S. IT Hardware Stocks Slide Amid Economic Uncertainty

U.S. IT hardware stocks saw declines due to a sector downgrade by Morgan Stanley. Concerns over reduced enterprise demand, rising component costs, and economic uncertainty influenced the decision. Key companies like Logitech, NetApp, and CDW experienced notable share decreases. Analysts predict a cautious outlook for hardware spending leading into 2026.

U.S. IT hardware stocks took a hit on Tuesday following a sector downgrade by Morgan Stanley, which cited potential cuts in corporate spending amid decreasing enterprise demand and escalating component costs.

Companies like Logitech and NetApp saw significant stock drops in premarket trading. Similarly, CDW's shares fell after its rating was lowered, while other tech giants such as Dell Technologies, HP Inc, and Hewlett Packard Enterprise also suffered losses.

Morgan Stanley's survey unveiled a forecast of merely 1% hardware budget growth in 2026. The brokerage noted the impact of AI-driven demand paired with tariff uncertainties and warns of possible downsides in earnings estimates towards 2026 due to potential cost hikes.