Hyperscaler Capex to Hit $667B in 2026, Enterprise Software Declines May Pressure Dell
Jefferies downgraded four application software names to Hold, noting YTD declines of 30–55% versus a 24% drop in the IGV benchmark and flagging intensifying AI disruption risks that may pressure enterprise spending. Goldman projects $667B in 2026 hyperscaler capex, up 62% YOY, underscoring tailwinds for Dell’s server and storage revenues.
1. Rising AI Infrastructure Spending
Hyperscalers plan $667B in capex for 2026, a 62% year-over-year increase, with compute capacity set to expand from 15GW at year-end 2025 to 35GW by 2028, driving strong demand for servers and storage hardware.
2. Software Sector Pressures
Application software stocks have underperformed, trading 30–55% lower year-to-date versus a 24% decline in the broader IGV benchmark, prompting downgrades for four major names due to execution concerns and elevated AI disruption risks.
3. Impact on Dell Technologies
Dell stands to benefit from robust hyperscaler infrastructure investments through increased server and storage sales, though caution in enterprise software spending and risk-averse sentiment may temper growth in its services and software divisions.