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Dell Technologies Inc. (DELL) stock fell Thursday, extending Wednesday's decline of more than 11% after Barclays downgraded the stock over valuation concerns and uncertainty surrounding enterprise artificial intelligence spending.
The selloff came despite CEO Michael Dell expressing confidence in sustained AI infrastructure demand during a CNBC interview.
Broader market weakness added pressure, with the Nasdaq falling 1.31% and the S&P 500 declining 0.41%.
On Wednesday, Barclays analyst Tim Long downgraded Dell from Overweight to Equal-Weight and lowered his price forecast to $574 from $603.
Long cited Dell's elevated valuation following a rally of more than 300% in 2026. He also questioned whether enterprise AI adoption would generate enough additional hardware spending to sustain the company's rapid growth.
The analyst suggested that higher memory prices, rather than a broad shift toward enterprise AI, have supported much of the recent revenue growth.
Although Dell's AI server business remains strong, Barclays expects overall growth to slow over the next two years.
Despite Wall Street's concerns, Michael Dell remains optimistic about the AI infrastructure market.
During a CNBC interview, Dell said demand for AI computing infrastructure continues to exceed supply. He expects the imbalance to persist through 2030, although he acknowledged uncertainty surrounding long-term forecasts.
Dell pointed to the time required to expand semiconductor production capacity. Building a new chip fabrication plant can take roughly four years, while AI technology continues to advance rapidly.
This gap could sustain demand for computing infrastructure even as manufacturers work to expand capacity.
Dell said major technology companies and leading AI research labs drove the first wave of infrastructure investment. However, broader adoption among businesses is only beginning.
He also highlighted the complementary roles of hardware providers in the AI ecosystem.
NVIDIA Corp. (NVDA) develops the advanced computing technology that powers AI systems, while Dell supplies the servers and infrastructure businesses need to deploy them.
The contrasting views highlight a key question for investors: whether growing enterprise AI adoption can sustain Dell's momentum after its sharp stock rally.
Dell shares fell below their key short-term moving averages, signaling weakening momentum.
The stock traded 16.6% below its 20-day simple moving average (SMA) of $552.47 and 10.1% below its 50-day SMA of $512.71.
Shares hovered near their 100-day SMA of $461.53, an important level for traders watching whether the stock can stabilize.
Meanwhile, the moving average convergence divergence (MACD) indicator remained below its signal line, suggesting weakening buying momentum.
Despite the recent decline, Dell's longer-term trend remains positive. The stock trades 47.6% above its 200-day SMA of $312.31.
The 50-day SMA also remains above the 200-day SMA, maintaining a bullish technical pattern known as a golden cross.
Key resistance stands near $463.50, while support is around $424.
Dell Technologies shares were down 9.40% at $460.20 at the time of publication Thursday, according to market data.
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