Barclays Downgrades Dell, HPE and NetApp Over Slower Enterprise AI Adoption
Barclays lowered its ratings on Dell, Hewlett-Packard Enterprise and NetApp, citing limited enterprise AI spending, and the three stocks fell sharply.
Dell Technologies' shares fell 11% on Wednesday after Barclays downgraded the stock along with Hewlett-Packard Enterprise and NetApp. The downgrade followed the analysts' assessment that enterprise spending on artificial intelligence is not yet sufficient to sustain the recent surge in AI-related hardware sales.
Barclays' report to clients said the firms have not demonstrated a "meaningful AI inflection" in enterprise spending and that recent revenue growth appears tied more to a global memory shortage than to AI demand. The analysts noted that businesses typically allocate only about 5% of IT budgets to AI and that roughly a quarter of total enterprise AI spend goes to hardware.
The downgrade shifted sentiment in the AI infrastructure sector, which had previously benefited from optimism about long-term demand for servers and related equipment. Dell, which had risen more than 300% this year, along with HPE and NetApp, had been among the top performers on the market.
Other data-center equipment makers also declined, with Hewlett-Packard Enterprise, Oracle and Super Micro joining the downward move. Oracle dropped 9% on the day and is down 33% for the year, while cloud-focused company CoreWeave fell 15%, erasing its 2026 gains.
Barclays warned that as memory prices normalize or fall, revenue for infrastructure companies could be pressured. The broader market for memory components has been volatile, with shares of Micron, SK Hynix and Western Digital all declining after news of progress by China's ChangXin Memory Technologies.