Dell, HPE and NetApp Stocks Slump After Downgrades on Worries About AI Spending

Get personalized, AI-powered answers built on 27+ years of trusted expertise. Some of this year's hottest stocks are taking a hit Wednesday after downgrades from Barclays. Barclays analysts lowered their ratings for Dell (DELL), Hewlett Packard Enterprise (HPE) and NetApp (NTAP) to "equal weight" from "overweight" Wednesday, citing concerns about enterprise AI spending growth. Dell (DELL) led S&P 500 decliners with an 11% tumble on a down day for markets, while HP Enterprise (HPE) shares were down 8% and NetApp sank 7%. The Barclays analysts said higher prices driven by a shortage of memory parts have "propped up revenues for the enterprise focused names," sending shares soaring in recent months, but that they "don't see a meaningful AI inflection yet," which could limit further upside for the stocks. While Dell and HPE could continue to top revenue and profit estimates in the near term, the analysts said the pace of sales growth could start to slow once prices normalize and potentially fall. Even with Wednesday's slump, Dell shares have roughly quadrupled in value since the start of the year, while HPE and NetApp have more than doubled. All three rank among the S&P 500's top performers this year.

Dell, HPE and NetApp Stocks Slump After Downgrades on Worries About AI Spending

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