Dell Shares Fall 23% in Five Sessions as AI Growth Meets Margin Pressure

From its Oct. 9 close to the Oct. 16 close, Dell lost 22.9%, ending Friday at $451.71 at 4 p.m. ET (20:00 UTC). The decline came as strong AI-server demand and higher revenue guidance coincided with lower first-half gross-margin rates.

The stock closed at $586.06 on Oct. 9. Shares fell 11.27% on Oct. 14, 6.80% on Oct. 15 and 4.58% on Oct. 16. Thursday’s 6.8% decline extended the selloff into a second session.

Barclays downgraded Dell to Equal Weight from Overweight on Oct. 14 and lowered its price target to $574 from $603. The stock fell 11.27% that day.

Dell’s fiscal second-quarter revenue rose 58% year over year to $47 billion for the quarter ended July 31. Revenue from AI-optimized servers doubled to $16.4 billion. Dell recorded $60.9 billion in AI-server orders and ended the quarter with a $95 billion backlog. Orders, recognized revenue and backlog are separate measures.

The results also showed pressure on gross margins. For the first half of fiscal 2027, Dell’s GAAP gross-margin rate fell 10 basis points to 19.4%, while its non-GAAP rate declined 30 basis points to 19.7%. Dell attributed the declines primarily to a shift in sales mix toward AI-optimized servers.

Dell raised its fiscal 2027 revenue guidance by $25 billion to $192 billion and increased its AI-optimized server revenue outlook to $74 billion. The company forecast fiscal third-quarter revenue of $49 billion.