Morgan Stanley analyst Katy Huberty upgraded her IT Hardware industry view by two notches, to Attractive from Cautious, stating that she now forecasts 6.6% average revenue growth in 2018.

This level of growth would be an acceleration from the past few years and tops the consensus view of 5.9%, noted Huberty. She points to a survey of 100 CIOs that indicates faster planned IT budget growth than three months ago, expectations for faster gross margin expansion, and the benefits of U.S. tax reform to support her view. She favors stocks with enterprise exposure that don't price in a growth acceleration, naming HP Enterprise (HPE) and IBM (IBM) as her top picks. In the same note, Huberty raised her FY18 gross margin view for Apple (AAPL) and increased her price target on the iPhone maker's shares to $205 from $200.

This morning, Huberty upgraded HP Enterprise to Overweight and upgraded NetApp (NTAP) and Teradata (TDC), both to Equal Weight from Underweight. She also downgraded HP Inc. (HPQ) to Equal Weight, as previously reported.