Dell Technologies stock is likely to lose steam as demand for its servers tied to artificial intelligence appears to be fully baked in, according to UBS. The investment bank downgraded the hardware name to neutral from buy. It raised its price target on shares to $243 from $167, suggesting roughly 7% downside from Friday’s close. “Accelerating AI server demand [is] largely priced in,” analyst David Vogt said Sunday in a note to clients. “The risk/reward going forward is more balanced following strong execution over the past 12 months.” Shares of Dell have surged 172% over the past 12 months, while the S & P 500 has gained 31% during the same period. In 2026 alone, the stock has ripped more than 106% higher, while the benchmark index is up 8.1%. The company’s rally comes as large language models such as Anthropic’s Claude and OpenAI’s ChatGPT have embraced multimodal and multi-agent systems, fueling demand for AI processing power and capacity . That emerging technology revolution has boosted Dell’s AI server business, with the vertical notching $13 billion in revenue in the first quarter of fiscal 2027. “Since the company guide, several individuals of an AI competitor were charged with exporting Nvdia GPU based servers illegally. Therefore, we believe that neoclouds, enterprises, and sovereigns could shift future orders towards Dell,” Vogt said. “However, Dell’s NTM P/E mult and share price has increased ~70% since the news while we est the near-term EPS upside is more modest. Furthermore, given Dell’s AI exposure is more neocloud and enterprise, Dell customer capex should grow slower than hyperscaler capex given stronger balance sheets and cash flow generation at companies like Meta, Google, Amazon, and Microsoft,” he added. UBS’ call goes against consensus on the Street. Of the 28 analysts covering Dell, 20 have a buy or strong buy on shares, LSEG data shows.
