The stock of Dell Technologies (DELL) has been double-downgraded by analysts at leading Wall Street investment bank Morgan Stanley (MS).
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Ahead of Dell’s earnings report on Nov. 24, Morgan Stanley slashed its rating on the personal computer (PC) maker’s stock to a Sell-equivalent underweight from a Buy-equivalent overweight previously. Morgan Stanley also lowered its price target on DELL stock to $110 from $144.
The main reason for the rare double-downgrade is that Morgan Stanley expects rising prices for memory drives, a key component in Dell products such as its PCs and artificial-intelligence (AI) servers, to weigh on the company’s profit margins moving forward.
Rising Costs
In a note to clients, Morgan Stanley said that spot prices for NAND flash drives and dynamic random-access memory products have risen as much as 50% and 300%, respectively, in the last six months as tariffs impact the computer hardware market.
Dell is among the hardware manufacturers most exposed to higher prices, wrote Morgan Stanley in downgrading the stock. However, not everyone is bearish on DELL stock. On the same day, analysts at JPMorgan Chase (JPM) raised their rating on Dell’s stock due to strong demand for the company’s AI servers.
JPMorgan reiterated a Buy-equivalent overweight rating on Dell stock and boosted its price target to $170 from $165, saying they expect higher AI server revenue in coming quarters. The bank also added DELL stock to its positive catalyst watch.
Is DELL Stock a Buy?
Dell Technologies stock has a consensus Moderate Buy rating among 17 Wall Street analysts. That rating is based on 12 Buy, four Hold, and one Sell recommendations issued in the last three months. The average DELL price target of $168.33 implies 35.38% upside from current levels.
