What Happened?
Shares of computer hardware and IT solutions company Dell (NYSE: DELL) fell 5.3% in the morning session after Morgan Stanley downgraded its view on the IT hardware industry to 'cautious' and an analyst from the firm lowered the price target on Dell's stock.
The investment bank warned of a 'perfect storm' for the sector, citing slowing enterprise demand, rising component costs, and rich valuations. According to a Morgan Stanley survey, corporate hardware spending budgets were expected to see minimal growth. Specifically for Dell, an analyst at the firm maintained an 'Underweight' rating but cut the price target to $111 from $113. The negative sentiment was widespread, with other hardware stocks like HP Inc and Hewlett Packard Enterprise also falling. Broader market weakness also added to the pressure, as investors reacted to new tariff threats.
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What Is The Market Telling Us
Dell’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 2.9% on the news that analyst firm Barclays upgraded its rating on the stock to Overweight from Equal Weight, pointing to strong orders for the company's Artificial Intelligence (AI) servers.
The bank expressed growing confidence in Dell's position in the AI server space and noted improving opportunities in enterprise server and storage markets. The upgrade was driven primarily by stronger-than-expected demand for its AI-focused hardware. Barclays kept its price target on the shares at $148.
Dell is down 10.7% since the beginning of the year, and at $114.12 per share, it is trading 30.8% below its 52-week high of $164.88 from October 2025. Investors who bought $1,000 worth of Dell’s shares 5 years ago would now be looking at an investment worth $1,481.
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