Dell Technologies stock drops amid valuation concerns

Dell Technologies Inc fell 3.4% in morning trading Thursday, dropping to $469.51 as investors moved away from AI hardware stocks during a broader technology sector selloff.

The decline follows Wednesday's rally and continues a period of volatility that began after Barclays downgraded the stock in mid-October. Analyst Tim Long moved his rating from Overweight to Equal-Weight and reduced his price target to $574 from $603.

Barclays raised concerns about Dell's valuation and questioned whether enterprise artificial intelligence spending has meaningfully increased. The firm suggested that revenue growth at Dell and similar companies stems more from rising memory chip prices than from actual enterprise AI adoption.

"We believe the strong enterprise revenues are more of a function of memory costs than a move to enterprise AI at this time," Barclays wrote in its research note.

The downgrade highlighted uncertainty about the pace of AI-related spending in the enterprise technology sector.

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