IT hardware stocks may not fully reflect growing macro and earnings risks despite strong recent gains and elevated valuations, Morgan Stanley said Thursday in a report.

Hardware stocks have outperformed over the past three months as spending has remained stronger than expected, supported by enterprise customers pulling forward demand and optimism around the "CPU Renaissance" theme, the report said.

Earnings revisions are near 15-year highs, while the next 12-month price-to-earnings ratio is about four times the prior peak, the report said. The market is underestimating risks tied to the memory supercycle, supply-chain shortages, and a more volatile macroeconomic backdrop, Morgan Stanley said.

"However, our concerns won't necessarily materialize in a broad-based cautionary off-cycle earnings period, as the near-term resilience in spend is creating a more H2-loaded catalyst path," the report said.

Over the next two weeks, earnings are expected to be mixed, with Dell Technologies (DELL) likely to report the strongest results, followed by Hewlett Packard Enterprise (HPE) and Everpure (P), while HP (HPQ) and NetApp (NTAP) face a higher risk of weaker margins and EPS guidance, the report said.

Morgan Stanley boosted its price target on Dell to $170 from $110, raised Hewlett Packard Enterprise to $33 from $25, and lifted HP to $17 from $16.

Price: 247.29, Change: +4.35, Percent Change: +1.79