Morgan Stanley: F5 Is the Biggest Winner in Networking, Leading in Spending Intent Growth
nashnova research
Morgan Stanley's latest CIO survey shows F5's three-year net spending intent jumped from +5% to +24%, the steepest improvement among all vendors assessed; the bank calls F5 its top pick in networking, driven not by AI hype but by aging hardware and security upgrades.
Why did Morgan Stanley single out F5 as the sector's top pick?
F5's three-year net spending intent surged from +5% to +24% — a 19-percentage-point jump, the steepest improvement across all vendors surveyed.
By contrast, Cisco fell from +57% to +28% and Arista slipped from +29% to +25% — both trending down while F5 moved sharply higher.
This means → the money isn't chasing the AI hardware story here. It's flowing toward aging-equipment replacement and security upgrades — and F5 sits squarely at that intersection.
How real is the near-term order window?
49% of F5 customers plan to upgrade VIPRION or iSeries products within the next 12 months, up from 35% last quarter; demand is most concentrated in the next four to six months.
In plain terms = this is not a distant promise — it is real demand set to convert into orders within half a year.
Another signal: 55% of CIOs now prefer traditional vendors and their virtual products, up from just 31% last quarter — as the cloud-native narrative fades, customers are paying again for "stable, controllable" legacy solutions.
Why are traditional ADCs back in favor?
Traditional application delivery controllers — ADCs, the network devices that distribute traffic across servers to keep applications stable — saw usage climb from 43% back to 54%.
This reflects a post-migration reality: after an aggressive push to the cloud, enterprises found that many core workloads still need locally controlled traffic management. Cloud isn't a cure-all.
F5 is the dominant player in the traditional ADC market. This trend converts directly into its refresh orders.
What shape is the broader networking sector in?
Morgan Stanley maintains an "in-line" sector rating. The tone: modest growth recovery with rising defensiveness.
The 2026 networking equipment growth forecast rose to 3.0% from 2.6% last quarter; overall IT budget growth improved from 3.8% to 4.0%.
Networking climbed from fourth to third place in the "spending defensiveness" ranking. This means → CIOs are increasingly reluctant to cut networking infrastructure when budgets tighten — it is shifting from "discretionary" to "essential."
What is actually driving the refresh cycle?
The top refresh driver: "equipment aging / end of life" rose from 37% to 45%; security-related upgrades climbed from 21% to 28% — together they account for over 70% of stated refresh reasons.
Average replacement cycles for campus switches, data-center switches, and firewalls stand at 5.0, 4.7, and 4.4 years respectively. Longer cycles signal pent-up demand, not demand exhaustion.
In plain terms = customers aren't buying new toys. Their old gear can't hold up, their security gaps can't be patched — they have to replace.
Can price hikes pull orders forward?
A counterintuitive finding: 87% of CIOs reported quarter-on-quarter price increases, yet when asked what they'd do if vendors raised prices further, 40% would stick to plan and 40% would delay — only 18% would order early.
Project delays rose from 2% to 13%, but outright cancellations sat at just 3% and 45% of respondents reported no change in order cadence.
This means → the demand baseline is steady replacement, not panic buying. Customers won't rush because of price hikes, and they won't walk away either — they move at their own pace.
On security budgets, cybersecurity/SASE holds the top spot at 38% of networking spend; identity and access management — IAM, the technology controlling who can access what — jumped to the top cybersecurity priority (35%, up from 18% last quarter).
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