Barclays Cuts Dell Rating to Equalweight on Slowing Growth

Barclays downgraded Dell Technologies to Equalweight from Overweight and reduced its price target to $574 from $603, citing a slowing growth outlook and smaller expected earnings beats following a period of heavy outperformance.

The adjustment arrives after a large rally for the hardware maker. Dell shares have surged more than 355% year-to-date, outpacing the 14% gain recorded by the S&P 500 over the same period.

AI Server Projections and Revenue Models

Despite the downgrade, financial models indicate continued expansion in Dell's artificial intelligence infrastructure business. According to Barclays research, AI server shipments are expected to triple this fiscal year to reach $75 billion.

Looking further ahead, the bank's long-term modeling projects fiscal 2028 AI server revenue to climb to $100 billion. However, analysts note that the rate of expansion will decelerate as the market matures from its initial fast-growth phase.

Divergent Views Across Wall Street Firms

Other major financial institutions maintain varying perspectives on Dell's valuation and operational trajectory amid supply constraints and expanding enterprise demand:

• Goldman Sachs: Reiterated its Buy rating with a price target of $570, highlighting that persistent supply constraints continue to impact broader AI infrastructure deployment.
• TD Cowen: Adjusted its price target to $550 while maintaining a Hold rating, pointing to a substantial ongoing AI server backlog as a key operational factor.
• Susquehanna: Reiterated a Positive rating with a higher price target of $700, projecting an increase in traditional server revenues by fiscal year 2027 driven by downstream AI demand.

What Is at Stake for Investors

The split analyst community highlights the ongoing challenge of pricing future artificial intelligence hardware demand against cyclical supply chain bottlenecks. While firms like Susquehanna see traditional server recovery benefiting from broader enterprise AI integration, downgrades from institutions like Barclays signal that the margin for operational error has narrowed following the stock's historic ascent.