Dell Technologies Inc. shares tumbled 5.35% in intraday trading, intensifying the sell-off pressure on the hardware giant. The sharp decline extends the stock's recent weakness, as investors reassess the company's growth prospects in the competitive AI server market.
The drop was triggered by a bearish note from Morgan Stanley, which lowered its price target on Dell to $430 from $477 while maintaining an Equal-weight rating. The downgrade reflects persistent market concerns over the sustainability of AI server profit margins, a key growth driver for Dell. The revised target, now below the stock's trading level, reinforced cautious near-term earnings expectations ahead of the company's next earnings report scheduled for September 3.
The move adds to a growing divergence in analyst sentiment. While Citigroup raised its target to $515 in late July on strong AI infrastructure demand, Morgan Stanley's more cautious stance highlights the uncertainty surrounding the profitability of AI-related sales. Dell had already been under pressure, suffering its largest single-day drop since April last year on July 28, indicating that the market remains sensitive to any signs of margin compression in its AI server business.
Comments