Dell dives on double downgrade from Morgan Stanley
JPMorgan analysts, on the other hand, have a much different view.
Dell dove early Monday after receiving a double downgrade from Morgan Stanley analysts, who axed the shares from “overweight,” bypassing “neutral” and dropping them all the way to “underweight,” or essentially a “sell” rating.
The analysts also chopped their price target on the shares to $110 from $144. They cited the surging costs of important ingredients in Dell products — like memory chips known as NAND and DRAM — which have seen prices leap because of the boom in AI investment.
Those soaring prices for data storage have supercharged the share prices of companies like Seagate Technology Holdings, Western Digital, and Sandisk in recent months. (They’re also surging today.)
But those costs may weigh on tech hardware makers like Dell, which now need to pay a lot more for what have long been relatively cheap commodity inputs.
“Memory (NAND and DRAM) — a key cost component for servers, storage arrays, PCs, smartphones, etc. — is in the midst of a pricing ‘supercycle,’” Morgan Stanley analysts wrote in the note published late Sunday night, adding, “This as an emerging, and potentially significant, risk to [2026] earnings estimates.”
If the decline in Dell’s share price Monday is any indication, the market finds Morgan Stanley’s analysis persuasive. But not everyone agrees.
Tech hardware analysts at JPMorgan actually put out a bullish note on Dell on Monday. They acknowledged the risk of skimpier margins for the company on some products, but focused on the upside offered by Dell’s own participation in the AI boom selling its servers to data center builders.
JPM put the company on “positive catalyst watch,” meaning they expect the company’s upcoming earnings release could generate a positive surprise, and raised their price target to $170 from $165. They rate the shares “overweight.”
“The momentum in AI server demand evidenced last quarter, including from customers like xAI, and the robust pipeline highlighted by peer companies such as Super Micro, leads us to see a positive setup for Dell heading into the upcoming... earnings print, and even more so for the outlook,” JPM analysts wrote.
For now, it seems like the recently jittery market is siding with Morgan Stanley on this one. But we’ll see what kind of quarterly numbers Dell delivers on November 25.
