By Sam Boughedda
Investing.com -- Dell Technologies Inc. (NYSE:DELL) tumbled 7% at the open on Thursday after Morgan Stanley downgraded the stock to "equal weight" from "overweight" and reduced its price target to $60 from $66.
Erik Woodring, an analyst at Morgan Stanley, told investors in a research note that "cracks are emerging" in the PC outlook.
He added that there is an "increasing risk of negative hardware budget revisions, hardware earnings revisions peaking, and the potential for further multiple compression, which historically has resulted in IT hardware underperformance."
"We believe PC and consumer hardware spending will be pressured as supply improves and demand normalizes after 2 years of above-trend growth,” explained the analyst.
HP Inc. (NYSE:HPQ) shares also fell Thursday, after it was also downgraded. Woodring lowered HP to “underweight” from “equal weight.”