Barclays Downgrades HPE, Dell, and NetApp Citing High Valuations and Slow AI Growth
Shares of Hewlett Packard Enterprise Co. (HPE), Dell Technologies, Inc. Class C (DELL), and NetApp, Inc. (NTAP) faced downward pressure following rating downgrades from Barclays. Analyst Tim Long lowered ratings on all three IT hardware companies from Overweight to Equal Weight, cutting price targets for HPE to $77 and Dell to $574, while holding NetApp’s target at $219.
The cautious pivot follows a strong run for enterprise hardware providers over the past year, during which HPE gained roughly 177%, Dell surged 273%, and NetApp rose 101%. Analysts pointed out that elevated stock valuations and rising commodity costs have already boosted revenue, but enterprise demand has not yet shown a meaningful inflection driven by artificial intelligence.
Investors will be watching upcoming enterprise spending reports and AI adoption metrics to see whether hardware demand picks up. Revised price targets suggest narrow remaining upside for Dell and HPE relative to recent trading prices, while NetApp continues to trade above average analyst target estimates.
Key points
- Barclays lowered ratings on Hewlett Packard Enterprise Co. (HPE), Dell Technologies, Inc. Class C (DELL), and NetApp, Inc. (NTAP) to Equal Weight.
- Price targets were reduced to $77 for HPE and $574 for Dell, while NetApp's price target remained unchanged at $219.
- Analysts cited elevated stock valuations and a lack of a meaningful AI-driven revenue inflection in enterprise spending.
- All three stocks experienced substantial rallies over the past year, led by Dell's gain of approximately 273%.
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How we writeDisclaimerQuestions and answers
Why were HPE, Dell, and NetApp stocks downgraded?
Analysts downgraded the companies due to concerns over high stock valuations after massive rallies over the past year, combined with a lack of a meaningful artificial intelligence inflection in enterprise spending.
What are the new price targets for HPE and Dell?
Barclays lowered its price target for HPE to $77 from $83 and reduced Dell's price target to $574 from $603. NetApp's price target was maintained at $219.
How much have HPE, Dell, and NetApp stocks gained over the past year?
Over the past year, Dell stock gained approximately 273%, HPE stock climbed about 177%, and NetApp shares advanced around 101%.