Barclays Downgrades Dell, Infrastructure Revenue Surges

Dell Technologies (DELL) shares fell 11.3% on Wednesday, October 14, 2026, significantly outpacing the 1.1% decline in the S&P 500. The drop followed a same-day downgrade from Barclays, which lowered its rating on the stock to Equal Weight from Overweight due to concerns that enterprise AI adoption is lagging expectations. Despite this analyst caution, the company’s infrastructure division has continued to expand rapidly, prompting questions about the shifting balance of Dell’s revenue streams.

Dell’s Infrastructure Solutions Group generated $60.8 billion in fiscal 2026, which ended in January 2026. This division accounted for 53.6% of total company revenue, representing a 39.5% year-over-year increase. In contrast, the Client Solutions Group grew 5.4% to reach $51.0 billion. A year prior, the client business was the larger segment, holding 50.6% of revenue compared to 45.6% for infrastructure. Over that single year, infrastructure overtook the client operations to become the majority of Dell’s revenue.

Even after Wednesday’s decline, Dell trades at a multiple of 28.8 times its trailing twelve-month earnings, compared with 22.7 times for the S&P 500. Investors appear to be paying this premium for growth, as revenue rose 57.7% in the three months to July 2026, or fiscal Q2 2027. This marks a sharp acceleration from the 10.5% growth rate seen in the twelve months prior to that period; trailing twelve-month revenue growth stood at 49.0%.

The market move did not alter Dell’s reported profitability for its latest quarter or past year. In fiscal Q2 2027, Dell posted an operating margin of 11.6%, up from 6.4% in the same quarter a year earlier. Net income over the past twelve months reached $11.4 billion, more than double the $4.84 billion recorded in the preceding twelve months. The trailing twelve-month operating margin stood at 9.6%, the highest level recorded at any quarter-end in data going back to fiscal Q3 2017.

This margin metric is central to assessing whether Dell’s faster revenue growth continues to translate into higher profits. The company’s next report is expected on or around November 23, 2026.