HPE Stocks Fall 6.3% After Downgrade Puts Server Revenue Under S

Dell shares fell 17% over two days after Barclays downgraded the stock, citing concerns that revenue growth is driven by higher memory prices rather than increased enterprise AI demand. The stock closed near $473, down 20% from its September record. Barclays also downgraded HPE and NetApp, lowering Dell's price target to $574 from $603. Despite the drop, Dell's shares have nearly quadrupled this year.

HPE stock fell 6.3% to $59.15 after Barclays downgraded it to Equal Weight, citing concerns about enterprise AI spending growth. The company reported $12.2B in quarterly revenue, with servers contributing $6.8B. Barclays lowered its price target to $77 from $83. HPE's shares are 107.31% above GuruFocus's $28.44 GF Value estimate.

Hewlett Packard Enterprise (HPE) plans to invest $75 million over five years to expand its Chippewa Falls operations, creating 75 jobs. The Wisconsin Economic Development Corporation (WEDC) approved up to $5.1 million in tax credits for the project, which focuses on AI and high-performance computing. HPE previously exceeded its 2021 commitments, investing $25.9 million and creating 120 jobs.

Hewlett Packard Enterprise (HPE) shares fell after Barclays and Evercore ISI downgraded the stock, citing high valuations and doubts about AI-driven revenue sustainability. Barclays cut its price target to $77. HPE's long-term prospects include networking demand and AI infrastructure, but risks include supply constraints and debt. YTD performance: +165.84%.

Dell (DELL), Hewlett Packard Enterprise (HPE), and Super Micro Computer (SMCI) shares fell 7-8% after Barclays downgraded Dell and HPE to hold, citing uncertainty around enterprise AI spending. Dell's Q2 revenue growth was partly driven by memory shortages and higher component prices, with a record $60.9B in AI server orders. HPE and SMCI also faced pressure due to their ties to server demand. Tech ETFs like IYW and QQQ declined less, at 1%.

Dell shares dropped 11% after Barclays downgraded Dell, HPE, and NetApp, citing concerns that enterprise AI spending is not yet boosting hardware demand. Barclays noted that recent revenue growth may be due to higher memory costs rather than AI adoption. Other data center equipment companies, including Oracle and Super Micro, also saw declines.