HPE falls after Morgan Stanley downgrades, cuts PT

** Shares of AI server maker Hewlett Packard Enterprise HPE fall 2.4% to $22.29 premarket, after Morgan Stanley downgrades to "equal-weight" from "overweight"

** Investment bank also cuts HPE's PT to $25 from $28

** MS cites "unprecedented memory cycle" with prices of NAND and DRAM rising 50% and fourfold, respectively, in last six months

** Investment bank says memory 'supercycle' increasingly poses downside risk to Hardware OEM earnings heading into 2026

** "We believe margin pressure from a stronger AI server mix coupled with memory cost inflation will limit multiple expansion and positive estimate revisions," MS says

** MS says cycle is misalignment between inflating input costs and tepid non-AI hardware demand trends

** MS cuts HPE's FY26 gross margin forecast by 260 basis points to 32.9%

** 10 of 22 brokerages rate stock "buy" or higher, 10 "hold"; their median PT is $26 - LSEG data

** Up to last close, HPE up 6.93% YTD vs 13.22% gain for S&P 500 Technology Hardware, Storage & Peripherals (.SPLRCTHSP)