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Barclays downgraded Dell Technologies, Hewlett Packard Enterprise, and NetApp to Equal Weight from Overweight in a Wednesday note, citing valuations that have advanced too far without a corresponding inflection in enterprise AI adoption.
The bank's analyst, Tim Long, noted that the seven enterprise-exposed stocks in his coverage have risen an average of approximately 140% this year, significantly outpacing the 14% gain in the S&P 500.
Consequently, the group now trades at about 21 times estimated 2027 earnings, a multiple well above its five-year average of around 15 times. Dell shares have climbed more than 300% this year.
Long attributed a substantial portion of this increase to the company's ability to offset memory cost inflation through price increases.
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