TD Synnex (SNX) delivered a strong fiscal Q2, driven by accelerating Hyve growth, market share gains, expanding capacity, and management's confidence in sustained H2 growth, Morgan Stanley said in a note emailed Friday.

The bank said the biggest highlight of the "blowout" quarter was rising revenue and gross billings growth at Hyve, with management announcing plans to add one million square feet of manufacturing capacity to support new program wins, increasing existing capacity by more than 50%.

Growth in North America and Europe was at roughly twice the market rate, "signaling share gains, wallet share capture, and new customer/vendor wins," the firm said, adding that, looking ahead, TD Synnex could also benefit from Dell's (DELL) decision to terminate its North American distribution contract with Arrow Electronics (ARW).

The bank said they are raising its fiscal 2026 and fiscal 2027 earnings per share estimates for TD Synnex to $18.85 and $23.39 from $17.80 and $21.33, adding that it believes fiscal Q3 guidance and the implied fiscal Q4 EPS are "conservative," with fiscal 2026 EPS of more than $20 still achievable.

Morgan Stanley raised its price target on TD Synnex from $341 to $374 while keeping its overweight rating.

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