DeepSeek News Plunges IT Hardware Stocks, But Analyst Sees 5 Bright Spots Among Tech Giants

IT hardware stocks have dropped following the DeepSeek news.

Despite the plunge, BofA Securities analyst Wamsi Mohan likes stocks such as Corning Inc GLW, Hewlett Packard Enterprise Co HPE, Western Digital Corp WDC, Seagate Technology Holdings PLC STX, IBM IBM and Apple Inc. AAPL for various idiosyncratic reasons.

The analyst focused largely on non-AI-themed stocks that have specific catalysts.

Corning: The analyst noted that Corning's key drivers include a cyclical recovery in its optical business, growth in Lumen/BEAD programs, solar opportunities, stable display profitability and its upcoming Investor Day on March 18.

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Hewlett Packard: The company's key drivers are the Juniper Networks, Inc. JNPR acquisition and synergies, IT spending recovery and cost-cutting initiatives, with AI server exposure not factored into the valuation.

The analyst anticipates Hewlett Packard will experience a pro-forma EPS increase of 8% for 2026, excluding synergies, and 18% with $350 million in cost synergies.

Western Digital: The company's key driver is the upcoming spin-off, which is expected to unlock value between $5-$10 billion.

Seagate Technology: The firm's key drivers include the ramp-up of HAMR, higher gross margins from high-capacity drives, and sustained data center spending.

Apple: The tech behemoth's key drivers include the iPhone SE launch, insourcing the modem for higher margins, WWDC with AI use cases, and iPhone 17 in Sept 2025.

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