Podcast | Morgan Stanley Tech Talk: Erik Woodring on WDC & STX HDD pricing checks; DELL & HPE Server checks, AAPL Siri AI & Foldable SKU | Episode 308

Research evidence excerpt

Podcast | Morgan Stanley Tech Talk: Erik Woodring on WDC & STX HDD pricing checks; DELL & HPE Server checks, AAPL Siri AI & Foldable SKU | Episode 308

IdeaMValuation Methodology and Risks

Apple, Inc. (AAPL.O)

Our $360 PT is based an 9.1x EV/Sales FY27 multiple, which is derived from a regression of

tech and consumer platform peers. Our price target implies ~35x P/E on $10.30 FY27 EPS.

Risks to Upside

n iPhone 17 outperforms expectations

n Apple Intelligence adoption surprises to the upside

n Apple pulls forward form factor changes

n Services growth re-accelerates despite tougher compares

n Gross margins surprise positively

Risks to Downside

n Weak consumer spending limits iPhone upgrade rates

n Higher memory input costs

n Limited progress on AI features

n Geopolitical tensions

n Increased regulation, particularly with App Store

Dell Technologies Inc. (DELL.N)

Our $448 PT is based on a 20x P/E multiple on FY28 (CY27) EPS of $22.40. This is 2x turns

above DELL's prior peak valuation (and well-ahead of T5Y average valuation) to account for

premium revenue/EPS growth and scarcity value vs. peers that are not executing to the same

degree as DELL. We are hesitatnt to asribe a meaningfully higher multiple given there are still

uncertanties that exist around the magnitude and duration of current growth rates.

n Enterprise AI spending drives sustainability in the current cycle into FY29.

n Edge AI is reinvigorated by NVDA's new workstation launch (halo effect).

n Internal opex savings drives consistent opex declines

n AI Capex cycle slows

n Supply scarcity value and pull-forward start to decelerate resulting in NTM EPS rolling

over sooner than modeled.

n Enterprise IT demand cannibalized by cloud workload migration

Hewlett Packard Enterprise (HPE.N)