Dell shares fall 11% as investors question returns on AI infrastructure spending
DELL•Dell shares fell 11% Wednesday as investors questioned whether enterprise AI spending could sustain infrastructure demand. Barclays downgraded Dell, HPE and NetApp, citing uncertain enterprise AI adoption, while rising memory costs and higher financing costs added to concerns.
1. Shares and ratings
Dell shares plunged 11% Wednesday. Barclays downgraded Dell, HPE and NetApp from buy-equivalent to hold-equivalent ratings, citing substantial share-price gains and uncertain enterprise AI adoption.
2. Spending and cost concerns
Barclays estimated businesses allocate about 5% of IT budgets to AI, with hardware receiving roughly a quarter of enterprise AI spending. Rising memory costs, rather than accelerating AI deployments, drove stronger infrastructure revenue, leaving suppliers exposed to a reversal as prices normalize. Higher financing costs also compounded concerns over AI infrastructure returns; Oracle fell 9% Wednesday and CoreWeave dropped 15%.
