CDW Stock Jumps Nearly 6% — Why Morgan Stanley Is Growing More Optimistic On This IT Play

The Wall Street bank says concerns around AI disruption and weak software sales have created an attractive entry point in CDW.

• Morgan Stanley upgraded CDW to ‘Overweight’ and raised its price target as well.
• The firm reportedly says that while CDW has lagged peers, the “IT disruption” concerns are overstated, with positive estimate revisions expected to return in the second half of 2026.
• A $1-billion share buyback, announced in late May, could provide additional upside for the stock, according to Morgan Stanley.

Shares of CDW Corp (CDW) jumped nearly 6% in intraday trading on Tuesday after Morgan Stanley turned bullish on the hardware and software company. The bank said the stock is positioned to outperform after a period of relative underperformance and offers an attractive way for investors to gain exposure to the enterprise server market.

At the time of writing, the CDW stock was trading about 5.5% higher.

CDW Upgrade Backed By Strong Server Demand

Morgan Stanley analyst Erik Woodring upgraded CDW to ‘Overweight’ from ‘Equal Weight,’ and raised its price target to $170 from $142, implying about 32% upside over the stock’s Monday closing price.

The firm said enterprise server demand is “proving far more inelastic than expected” due to compute shortages, refresh activity, and growing AI-related infrastructure, according to TheFly. Morgan Stanley views CDW as one of the most attractive ways to play server demand upside.

While CDW has been the “clear laggard of the group,” the bank said the “IT disruption” thesis is overstated, with positive estimate revisions expected to return in the second half of 2026.

CDW Valuation Seen As ‘Compelling Relative To Peers’

Morgan Stanley said CDW’s “valuation remains compelling relative to peers.” The firm said the “IT disruption” thesis surrounding the company is overstated and that positive estimate revisions and a return to operating leverage in the second half of the year should help address those concerns, reported CNBC.

CDW has faced pressure from concerns that rising inflation and broader artificial intelligence adoption could hurt growth. Weakness in software revenue has also weighed on profit margins, stated the CNBC report.

Despite those challenges, Morgan Stanley said more than 20% of the company’s revenue has been driven by stronger-than-expected demand for servers, storage and networking products.

Morgan Stanley also highlighted CDW’s incremental $1 billion share repurchase plan announced in late May, saying the buyback could provide additional upside for the stock.

CDW Stock: What Retail Says

Stocktwits sentiment on CDW was ‘neutral.’ Over the past 30 days, message volume around the stock has risen by 200%.

Morgan Stanley’s positive view aligns with broader Wall Street sentiment. According to Koyfin data, seven of the 10 analysts covering CDW rate the stock a ‘Buy’ or ‘Strong Buy.’

Year-to-date, CDW shares have fallen by over 8%. 

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