Why Dell Technologies Stock is Plunging to Lead S&P 500 Decliners Monday

Core Insights - The artificial intelligence boom is driving up memory chip prices, negatively impacting computer hardware manufacturers like Dell, HP, and Hewlett Packard Enterprise, according to a Morgan Stanley report [3][4][6] Company Performance - Dell Technologies shares have decreased by over 10% in recent trading, leading declines in the S&P 500, while Hewlett Packard Enterprise and HP shares have also seen significant drops of 8% and 7% respectively [2][6] - Dell shares have lost more than 25% of their value since reaching a 52-week high two weeks ago [1] Market Analysis - Morgan Stanley analysts indicate that the current pricing "supercycle" for NAND flash memory and DRAM semiconductors poses a downside risk to hardware OEM earnings, particularly as component costs rise [4][6] - Despite hardware valuations being near record highs, the increasing costs of memory chips could pressure profit margins for companies in this sector [3][4] Rating Changes - Morgan Stanley downgraded Dell from "overweight" to "underweight," HP from "equal-weight" to "underweight," and Hewlett Packard Enterprise from "overweight" to "equal-weight" due to the impact of rising memory chip prices [4][6] - The firm also lowered ratings for several other companies while maintaining a bullish outlook on certain IT hardware firms like Seagate Technology and Western Digital [4]