Shares of Hewlett-Packard slid 11 percent premarket on Friday, a day after the world's biggest PC maker said it may spin off the business, and cut its outlook, signaling a massive overhaul in the wake of bleak tech spending across the board.

The company, which for years represented everything Silicon Valley, has been struggling with its once hugely popular PC business, with niftier gadgets like Apple's iPad eating into market share.

It also stopped production of its WebOS-based tablet product, which failed to find favor with buyers, and said it will buy British software company Autonomy Corp to boost its cloud business.

We are directionally positive on the shift to high-growth, high-margin business but this transformation is proving expensive, protracted and includes significant integration risk, Robert W. Baird said in a research note.

The brokerage downgraded HP's stock to neutral from outperform, cut its price target to $30 from $51, and said HP is no longer a safe haven stock.

HP's weak forecast follows smaller rival Dell Inc's lowered revenue outlook earlier this week that dragged down both stocks.

Baird expects HP to lose market share to Dell and others with the decision-making process to spin off the PC division taking 12-18 months.

Shares of the Palo Alto, California-based company were down 11 percent at $26.30 in trading before the bell. They closed down more than 6 percent at $29.48 on Thursday on the New York Stock Exchange.

(Reporting by Sayantani Ghosh and Rachel Chitra in Bangalore; Editing by Don Sebastian)

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