Hewlett Packard Enterprise's (HPE) solid order growth backs its strong fiscal 2027 guidance, following higher orders across the business in fiscal Q3, Morgan Stanley said in a Thursday note.

The company reported fiscal Q3 non-GAAP earnings of $1.11 per diluted share, up from $0.44 a year earlier, as net revenue rose to $12.21 billion from $9.14 billion. The period saw a 36% increase in networking orders and a 75% rise in traditional server orders, while artificial intelligence systems backlog reached about $7 billion, the brokerage noted.

Morgan Stanley said the order and backlog trends indicate demand durability into 2027, noting that a bulk of the company's outlook reflects this strong demand. The investment firms sees further upside to Hewlett Packard Enterprise's fiscal 2027 revenue growth outlook of 13% to 17%, according to the note.

Supply, however, remains as a limiting factor in the company's servers and networking business, Morgan Stanley noted.

Morgan Stanley cut its price target on Hewlett Packard Enterprise to $67 from $69, while maintaining its overweight rating.

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