Dell shares plunged 11% after Barclays downgraded the stock on concerns about enterprise AI timing. The sell-off dragged down other data center equipment names, as rising interest rate fears added pressure.
Dell shares plummeted 11% on Wednesday, dragging down other data center equipment names on concerns that enterprise AI spending won't justify the AI buildout. Hewlett-Packard Enterprise, Oracle and Super Micro all joined the downward slide.
Barclays questions enterprise AI demand
In a report to clients, Barclays analysts downgraded Dell, HPE and NetApp following the stocks' significant run and over the timing of enterprise AI. The analysts said they haven't seen a "meaningful AI inflection" in enterprise spending, according to CNBC's report on the note.
Barclays attributes the higher revenue to the global memory shortage, noting that infrastructure companies have passed higher memory prices along to customers. The analysts also found that only about a quarter of total enterprise AI spend is going towards hardware.
Crypto Briefing reported that Barclays cut its price target on Dell from $603 to $574 and moved the stock from Overweight to Equal Weight. Analyst Tim Long called the valuation stretched after the stock's gain of over 300% so far in 2026, according to the same report.
Rate fears hit AI borrowers
Sentiment toward AI infrastructure has also shifted, due in part to concerning OpenAI revenue figures and more broadly out of fear that rising interest rates will create a challenging environment, since so much of the buildout relies on debt. Oracle, a heavy borrower, dropped 9% and is now down 33% for the year. CoreWeave plunged 15%, wiping out its 2026 gains.
According to Crypto Briefing, the downgrade landed alongside a hot Consumer Price Index report for September, which stirred fears that borrowing costs could rise.
Memory stocks slide too
Memory names fell as well. Micron is down 11% for the week, SK Hynix has tumbled 13% in U.S. trading and Western Digital has dropped more than 8%, after China's CXMT reported progress on a new chip structure.
The sell-off sits awkwardly next to Dell's results. Crypto Briefing noted that the company's latest quarterly report showed a record $95 billion AI server backlog.
Sources: CNBC, Crypto Briefing
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