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Investing.com -- Bernstein has initiated coverage on U.S. IT hardware, arguing that the sector is entering what it calls the “Intelligence Revolution.”
The firm said Apple, Dell, Seagate, and SanDisk are best positioned to benefit, all rated Outperform.
“The structural headwinds that IT Hardware has traditionally faced (Moore’s Law, Cloud, Commoditization) are now abating,” Bernstein wrote. “We see sustainable increase in spending as AI expands the addressable market for IT and creates a potentially massive opportunity for IT hardware to return to growth.”
Bernstein projects enterprise inference could reach $1.3 trillion by 2030 in its base case, representing a 67% CAGR between 2025 and 2030.
While acknowledging near-term fears of an AI bubble, the analysts said “risk/reward skews to the upside,” with early signs of demand looking healthy.
On devices, Bernstein highlighted both risks and opportunities: “On-device AI introduces opportunities and risks for OEMs to reinvent devices from PCs to handsets and wearables; with Apple, as the gateway to the Intelligence Revolution, best positioned to gain the most (but also most at risk if poorly executed).”
The firm also pointed to the “data explosion” being amplified by AI, forecasting storage demand in data centers to rise at a 23% CAGR through 2030.
“Seagate as the leader in HAMR tech [is] best positioned,” Bernstein said, while “SanDisk should reap significant growth with the return of the New Memory Paradigm.”
Bernstein sees Dell benefiting from AI servers, with “significant EPS and FCF growth,” while noting IBM’s quantum computing push could also “return the business to growth.”
Overall, Bernstein concluded: “Hardware stock dispersion is high and valuations are relatively attractive, creating long-term and short-term opportunities.”