Dell Technologies Inc (NYSE: DELL) is under pressure on November 17th after a senior Morgan Stanley analyst double-downgraded the PC maker to “underweight”.
Erik Woodring trimmed his price objective on the Texas-based company as well to $110, indicating potential “downside” of about 18% from its previous close.
His bearish call on DELL shares is significant since they are already down more than 25% versus their year-to-date high of roughly $167 earlier this month.
Why did Morgan Stanley turn bearish on Dell stock?
Eric Woodring recommends trimming exposure to DELL stock at current levels primarily because rising memory costs could shrink the company’s margins moving forward.
In his research note, Woodring flagged Dell Technologies as a business that relies rather heavily on DRAM and NAND – two of the most volatile segments within the semiconductor supply chain.
These components represent a significant portion of the cost structure across Dell’s major product lines – and as prices climb, profitability could take a hit, he wrote.
“Companies facing margin headwinds underperform peers with similar growth rates, but stable-to-expanding margins.”
The Morgan Stanley analyst also pointed to historical patterns – citing a previous memory upcycle (2016 to 2018) that triggered a meaningful contraction of DELL’s gross margins.
In short, with memory inflation expected to persist, the investment firm sees valuation risk ahead.
Technicals point to further downside in DELL shares
Beyond fundamentals, the technical picture for DELL shares isn’t particularly encouraging either.
The NYSE-listed firm has already slipped below its 100-day moving average (MA) – and is now headed to challenge its 200-day MA as well at the $119 level.
If Dell Technologies fails to hold that support in the days ahead, the downward momentum could accelerate as traders often read such a breach of the 200-day MA as a bearish signal.
Investors should consider pulling out of Dell stock here also because historically (over the past four years), it has ended both December and January in the red.
A relative strength index (14-day) at under 30 further reinforces that bears remain in control in the near-term.
Dell isn’t particularly attractive heading into 2026
All in all, Dell shares appear to be entering a challenging phase, with macro cost pressures as well as bearish technical signals weighing on sentiment.
Rising DRAM and NAND prices threaten to erode margins, while historical cycles suggest this vulnerability is not easily shrugged off. Technically, the breach of major moving averages and an oversold RSI point to further downside risk.
With seasonal weakness historically hitting in December and January, investors may find limited near-term catalysts to support a rebound.
While the company did raise its long-term forecasts on AI tailwinds recently, until margin visibility improves and technical support stabilizes, caution seems warranted in playing Dell stock heading into 2026.
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