Barclays Downgrades Dell to Equal Weight Amidst Uncertain Enterprise AI Adoption

Downgrade Sparks Concerns Over Dell's AI Adoption

Barclays analyst Tim Long downgraded Dell Technologies to Equal Weight from Overweight, citing that enterprise spending on AI has not reached a meaningful turning point. Despite this, Dell's stock remains up 303.5% in 2026, with Michael Dell stating that demand for AI computing still exceeds supply and is just beginning to reach the enterprise sector. The bank attributes Dell's strong revenue growth to memory costs rather than AI adoption.

Mixed Signals from Michael Dell

Michael Dell offered a more upbeat reading of enterprise demand a day before the downgrade. In a CNBC interview on October 13, he said demand for AI computing still exceeds supply. 'We have had this sort of wave of usage by the frontier labs and certain companies. Now we are starting to see this wave in the enterprise, but it's really just the beginning. I think there would be a ton of infrastructure deployed around that,' he said. He also dismissed AI bubble fears, arguing there is not enough supply for one to form.

Analysts Weigh in

Barclays analyst Tim Long applied the same downgrade to Hewlett Packard Enterprise (HPE) and NetApp. The bank noted that businesses typically put just 5% of IT budgets toward AI. Hardware accounts for roughly a quarter of enterprise AI spending. They added that memory prices returning to normal levels and eventually declining could put pressure on infrastructure-related revenue.