Citi has revised its price target for NetApp (NTAP, Financial), decreasing it from $110 to $90 while maintaining a Neutral stance on the stock. This adjustment comes in light of anticipated challenges in the data center and personal computer markets. Despite a potential boost in the North American communications equipment sector, driven by the recent exemption from tariffs on PCs, smartphones, and 20 other products by the Trump administration, overall demand appears subdued.
The financial firm has recalibrated its forecasts for data center capital expenditures and PC sales, citing "macro induced weak demand" as a significant concern. While the communications equipment sector may experience some positive momentum, the broader market faces headwinds. With many enterprises adhering to established IT budgets, they show reluctance in increasing capital expenditures to counteract rising prices.
Additionally, Citi expresses a preference for stocks involved with artificial intelligence servers over traditional enterprise investments, anticipating a shift in focus as businesses aim to optimize budgets. The consumer segment is particularly expected to bear the brunt of this economic scenario, as inflation pressures and diminishing demand create a challenging environment.
