Price declines and AI-driven growth spur upgrades for TeraWulf and HPE, while Merck and Broadcom face downgrades on valuation concerns.
Analysts upgraded TeraWulf (WULF) and Hewlett Packard Enterprise (HPE) citing attractive entry points after recent price drops and strong AI-related demand. HPE reported 40% year-over-year revenue growth, driven by AI networking, making its valuation more compelling relative to peers.
TeraWulf’s shift in capital strategy and potential value from location development and contract sales contributed to the upgrade. Meanwhile, Merck (MRK) and Broadcom (AVGO) were downgraded due to elevated valuations and signs of exhausted market momentum, with concerns that growth expectations are already priced in.
The moves reflect broader sector rotations as investors reassess AI-driven growth stocks and rebalance portfolios based on valuation metrics.