Dell Technologies shares tumbled 11.6% on Wednesday, closing at $507.93, after Barclays downgraded the stock from Overweight to Equal Weight and lowered its price target from $603 to $574. Barclays cited valuation concerns following a more than 300% surge in Dell shares during 2026 and warned that enterprise AI spending may not be enough to sustain server sales growth, especially as memory prices normalize and reduce hardware makers' ability to charge premium server prices.
The downgrade was part of a broader AI infrastructure selloff. Barclays also cut Hewlett Packard Enterprise and NetApp to Hold-equivalent ratings. The technology sector fell more than 3% on October 14, with Oracle dropping 9% and CoreWeave plunging 15%, erasing its 2026 gains. Together, AI-linked companies lost an estimated $80 billion in market value. A hotter-than-expected September inflation reading revived fears of higher borrowing costs, pushing one CoreWeave bond yield toward 15%, a concern because much AI expansion is debt-funded.
Memory-related names also came under pressure: Micron was down 11% for the week, and SK Hynix fell 13% in U.S. trading after China’s ChangXin Memory Technologies reported progress on a new chip design. Despite the selloff, Dell bulls point to a record $95 billion AI server backlog, infrastructure revenue up 89% year over year, and management’s expectation that AI server revenue will triple to $75 billion in fiscal 2027, with a potential rise to $100 billion by fiscal 2028. Michael Dell expects demand for AI infrastructure to outpace supply from now until 2030, though he acknowledged uncertainty over chipmaker capacity expansion. Wall Street consensus remains a Moderate Buy with an average price target near $598.
