Dell Technologies Inc. (NYSE: DELL) has found itself in an uncomfortable spot. Strategic investors looking for less volatile stocks related to the secular growth of AI now have to pay close attention. Dell’s shares had more than doubled since the start of 2024. Now the stock was down nearly 25% from its high, and after a severe analyst downgrade the stock was down over 27% from its recent highs.
What is interesting is that the opposite views were issued by a rival call on the same day. That said, Dell was reacting to the negative analyst report almost without concerns that the positive call was even issued.
Morgan Stanley has issued a double-downgrade on Dell that took its stock down over 9% to $121.50 late on Monday. The prior Overweight rating was downgraded to Underweight, Morgan Stanley’s equivalent of a “Sell” rating. And the firm’s prior $144 price target (and $196 bull-case scenario) was slashed to $110 — indicating more projected downside ahead.
One key fear is that Dell is among the hardware firms facing the highest exposure to NAND flash and DRAM price hikes for its servers and PCs. Some of those memory products have seen prices jump 50% (NAND) to 300% (DRAM) over the past six months.
Morgan Stanley also weighed on HP Inc. (NYSE: HPQ). HP was downgraded to Underweight from Equal-Weight and its price target was cut to $24 from $26 in the call. The firm warns that HP’s margins tend to contract when memory prices rise.
JPMorgan does not share the views issued by rival Morgan Stanley. JPMorgan expects near-term revenue and earnings upside issued from AI-leveraged companies that should reassure investors.
JPMorgan reiterated its Overweight rating on Dell and raised its price target to $170 from $165, noting that Dell had purchased memory products when prices were much lower. It even thinks that Dell’s margin pressures may not be seen until 2027 instead of 2026 with upward revisions on AI server revenues. JPMorgan even added Dell to its “positive catalyst watch” list for near-term positive developments.
JPMorgan also reiterated its Neutral rating and $30 price target for HP, expecting solid quarterly results over the next week with lackluster guidance for the rest of 2026.
Dell was last seen trading over 9% lower at $121.00 late on Monday, and its 52-week range is $66.25 to $168.08. HP’s stock was trading down about 5.5% at $23.20 with a 52-week range of $21.21 to $39.80.
