Dell Technologies shares dropped 11.27% on October 14 following a downgrade by Barclays. The bank shifted its rating for Dell, Hewlett Packard Enterprise, and NetApp from Overweight to Equal Weight, citing concerns that enterprise AI spending has not reached a significant turning point.
Analyst Tim Long attributed the recent revenue growth at these hardware companies to global memory shortages rather than widespread AI adoption. Barclays noted that businesses currently allocate only about 5% of their IT budgets to AI, with hardware representing roughly a quarter of that expenditure.
Barclays lowered the price target for Dell from $603 to $574 and for HPE from $83 to $77. Despite the recent decline, Dell stock has risen approximately 303.5% in 2026. The company is currently trading about 14% below its record high of $588.40 reached on September 17.
In contrast to the bank's assessment, CEO Michael Dell stated on October 13 that demand for AI computing continues to outpace supply. He emphasized that enterprise AI adoption is in its early stages. Dell projects third-quarter revenue of $49 billion, representing an 81% increase year over year.
