Dell, HP Face 2025 Profit Wipeout From Tariffs, Analyst Says — Retail Turns Bullish On ‘Fire-Sale Discounts’

Dell Technologies, Inc. (DELL) shares plunged nearly 19% and that of rival HP, Inc. (HPQ) plummeted about 15% on Thursday as traders took stock of the impact of President Donald Trump’s reciprocal tariffs on the companies’ fundamentals.

Thursday’s plunge marked the biggest one-day loss for Dell in over 3 years and for HP, it was the steepest drop in five years, according to Koyfin.

In a note released Thursday, Morgan Stanley analyst Erik Woodring said the reciprocal tariffs were calamitous to the IT hardware industry, given all the hardware products sold into the U.S. are now subject to a 25%-54% import tax. 

The analyst sees sales cycles elongating due to the heightened uncertainty. As such, he remained cautious about companies with consumer exposure and  low margins.

The tariff costs, the analyst said, will likely be passed entirely to the end customer. 

Woodring said, “Hardware companies have few mitigation tools at their disposal to offset these tariffs, and as a result conclude that reciprocal tariffs are likely to severely impact demand/margins, and accelerate the hardware downcycle from here.”

Morgan Stanley listed Dell and HP among names that are worst positioned due to their relia ance on extensive international manufacturing, with the large majority of finished goods sold into the US assembled in the South East Asian nations.

“For DELL and HPQ, the added tariff cost could equate to nearly the entirety of their expected net income in 2025,” Woodring said.

On Stocktwits, retail sentiment toward Dell stock turned to ‘extremely bullish’ (87/100) by late Thursday from the ‘neutral’ mood that prevailed a day ago. The message volume perked up to ‘extremely high.’

A bullish watcher said they would buy the weakness, citing the “fire-sale discount" at which the stock was trading.

Sentiment toward HP stock remained ‘bullish’ (64/100), with the degree of positivity improving from a day ago. The message volume was at ‘low’ levels.

Dell and HP have so far lost about 33% and 23%, year-to-date.

The Koyfin-compiled consensus estimates for Dell and HP are $136.28 and $35.85, respectively, suggesting post the sell-off, these stocks trade at a discount of 76% and 51%, respectively.

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