Dell Stock Plunges 11% as Barclays Downgrades On AI Doubts

Dell Technologies (NYSE: DELL) shares fell 11.27% today after Barclays downgraded the server maker to Equal Weight from Overweight. The broker made the same cut on Hewlett Packard Enterprise and NetApp, citing stretched valuations after big rallies.

Dell closed at $507.93, down from $572.47 yesterday and its lowest finish since the 10th of September, when it ended at $506.62. That is about 14% below this year’s highest close, $588.40 on the 17th of September. Volume reached 11.6 million shares.

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Analyst Tim Long cut his Dell price target to $574 from $603. Barclays analysts wrote: “We believe the strong enterprise revenues are more of a function of memory costs than a move to enterprise AI at this time.”

Long added: “As a result, we expect a meaningful deceleration in growth over the next two years and memory price normalize and potentially decline.” Barclays also expects earnings beats to shrink.

The valuation argument is stark. The seven enterprise-exposed stocks Long covers are up about 140% this year on average, against about 14% for the S&P 500, and trade on about 21 times estimated 2027 earnings versus a five-year average near 15. Dell is up about 303% since the end of 2025, when it closed at $125.88.

Barclays still models Dell’s AI server revenue tripling to $75bn this fiscal year, with AI server operating margins of about 5%, and sees upside to earnings estimates, though with much smaller beats.

HPE fell 8.28% to $63.11 and NetApp lost 7.03% to $222.20, so Dell led the fall among the three names Barclays cut. Dell had already opened 4.3% lower, so the downgrade may not be the whole story.

For now the call rests on one broker’s view that memory prices, not enterprise AI, are driving the server strength.