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Dell Falls 8%, Hewlett Packard Enterprise Drops 4% as Barclays Cuts Both to Hold; Super Micro Slides 5%

Barclays just pulled its buy ratings on three major AI hardware names, and the reason has nothing to do with demand collapsing. A quiet force inside the supply chain may have been inflating server revenues all along.

By David Moadel
Published October 15, 2026, 9:38am ET · 3 min read

Market Movers desk. Editor: David Moadel.

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A long, dimly lit corridor in a data center. On both sides, tall server racks with transparent doors glow brightly with intricate golden and amber lights, resembling complex circuit boards or flowing data. The floor is dark and reflective, mirroring the warm light from the servers. The ceiling features parallel rows of bright white rectangular lights against a dark, textured grid.
The glowing server racks of a modern data center symbolize the critical digital infrastructure underpinning companies like Equinix, highlighted among today's top stock performers. © 24/7 Wall St.

Dell Technologies (NYSE:DELL | DELL Price Prediction) is leading a fresh retreat in artificial intelligence (AI) hardware, as doubts about the timing of enterprise spending hit server makers hardest. In morning trading, Dell stock is at $465.31, down 8%. That pressure is landing on companies coming off record backlogs and raised guidance.

Meanwhile, Hewlett Packard Enterprise (NYSE:HPE) stock is at $58.57, down 7%. Super Micro Computer (NASDAQ:SMCI) stock is at $33.13, also down 7%, matching Dell’s slide. Those falls. extend a data center selloff that Dell stock led on Wednesday.

Barclays cut its rating on Dell stock to the equivalent of hold from buy on Wednesday, applying the same downgrade to Hewlett Packard Enterprise stock and to NetApp (NASDAQ:NTAP) stock. The downgrade rests on the size of the run and on enterprise AI spending timing. Although Super Micro Computer wasn’t part of the rating action, its shares are sliding alongside the downgraded names.

DELL analyst ratings

Enterprise AI Spending Timing Drives the Downgrade

At the heart of the downgrade is the view that there hasn’t been a meaningful inflection in what businesses are actually spending on AI. Under that thesis, Dell’s recent revenue strength owes more to a global memory shortage pushing component prices higher than to new demand.

Memory chips were the tightest supply constraint Dell faced in Q2 FY2027, and rising input costs fed into its raised outlook. Configurations Dell sells cost more each quarter, which builds some inflation into its growth. Shortages also extended to NAND flash storage and some processors, leaving Dell’s demand ahead of what it could ship.

AI Hardware Reprices as Tech Funds Slip Less

Technology funds are sliding far less. The iShares U.S. Technology ETF (NYSEARCA:IYW) is at $255.88, down 1%. Large-cap technology is holding up similarly, with the Invesco QQQ Trust (NASDAQ:QQQ) at $719.84, down 1%.

That gap marks the selling as a repricing of the AI hardware trade, concentrated in the companies most tied to server demand. NetApp sells enterprise storage and data management, so the memory argument applies to its hardware business as well.

Dell’s Order Book Anchors the Bull Case

Dell’s bull case comes down to its order book. In its Q2 results, Dell booked a record $60.9 billion in AI server orders and ended the quarter with an all-time-high $95 billion AI backlog. Its traditional server and networking revenue soared 122% year over year, driven mainly by long-standing enterprise customers overhauling their data centers.

DELL earnings explorer

On top of that, Dell raised its fiscal 2027 revenue outlook to $192 billion and now projects $74 billion in AI-optimized server sales for the year. That outlook comes against a P/E ratio of 27x for Dell stock. However, part of that growth reflects higher component prices.

A similar question hangs over Hewlett Packard Enterprise, with networking and AI servers in its mix and its Juniper Networks integration still underway. Super Micro Computer carries an added risk, since its board is conducting an independent review of certain transactions tied to export-control issues.

Memory Prices Hold the Next Answer

The next test for Dell is whether memory prices hold, since the downgrade depends on what happens to infrastructure revenue when they stop rising. Hewlett Packard Enterprise’s Juniper Networks integration could reveal if its networking push can carry results.

Investors may want to moderate their position sizes in all three names until then, given the downgrade and component-price risk. The takeaway: record backlogs support the business, but the run leaves less room for error.

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David Moadel

David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.

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