Dell Technologies stock drops over 5% as AI rally faces valuation pressure

Dell Technologies shares fell 5.26% on Friday, sliding to $387.97 after a multi‑day pullback that began earlier in the week. The decline follows a sharp rally driven by strong AI‑server demand, as investors reassess how much of the AI growth is already priced in. GF Securities downgraded the stock to Hold, citing valuation concerns despite expectations of more than $70 billion in AI‑related revenue. Analysts remain largely bullish, maintaining a consensus Buy rating with an average price target around $472.

The sell‑off also coincides with rising memory‑chip costs that have compressed Dell’s gross margin to 18% from 21% a year earlier. Insider selling has added pressure, with insiders off‑loading over $1.5 billion of shares in the past three months. Nonetheless, Dell reported revenue of $43.84 billion for the latest quarter, up 88% year‑over‑year, and AI‑optimized server revenue of $16.13 billion, up 757% year‑over‑year.