Dell, Arista shares surge as JPMorgan lifts ratings on AI potential

Tech stocks surged on Monday as bond yields headed in the opposite direction. Some stocks outperformed as analysts continue to adjust ratings in the opening weeks of 2024.

On this occasion, JPMorgan made several rating changes in the Hardware & Networking sector for 2024.

Dell (NYSE:) stock has been upgraded to Overweight from Neutral, as the broker is anticipating benefits from its strong position in the AI-led compute investment cycle. Shares closed 4.6% higher.

Arista Networks (NYSE:) has been added to JPMorgan’s Analyst Focus List due to a combination of AI investments, new datacenter constructions, and upgrading cycles for switches by cloud companies, expecting a multi-year acceleration in growth.

In response, the stock was up 6.5%.

On the other hand, NetApp (NASDAQ:) has been downgraded to Underweight from Neutral.

The stock is seen as a relative underperformer compared to IT Hardware OEMs, which are predicted to benefit more directly from AI training and face fewer challenges related to rising memory prices.

NTAP stock rose 1.1% on Monday, underperforming Nasdaq.