F5's (FFIV) fiscal Q2 results exceeded expectations, driven by outperformance in its hardware segment, Morgan Stanley analysts said in a Wednesday note.

Analysts said the reasons for F5's continued strength include product refreshes, market share gains as hybrid architectures are built out, and growing use cases for artificial intelligence.

The company quantified that AI use cases are now expected to contribute about $50 million to revenue in the first half of the year, up more than 200% from a year earlier, analysts said.

Morgan Stanley said it was encouraged by the company's commentary on continued hardware growth next year, but said volatility in the software line item remains a challenge.

Analysts retained an equal-weight rating on the stock but increased their price target to $340 from $305.

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