Dell stock plunged 11% on Wednesday, leading a sell-off in data-center names after Barclays downgraded Dell, HPE, and NetApp. The bank's analysts cited concerns that enterprise AI adoption is lagging behind expectations.
In a note, Barclays wrote that strong enterprise revenues are more a function of memory costs than a move to enterprise AI at this time. That suggests recent earnings strength may be tied to cyclical pricing rather than durable AI-driven demand.
The downgrades add to mounting fears about the timing of enterprise AI spending, hitting shares across the data-center sector as investors reassess how quickly AI investments will translate into revenue.