Dell stock retreated in the premarket session as investors dumped technology shares amid concerns about artificial intelligence (AI). It retreated to $550 from last Friday’s close of $567 also as investors started to book profits. Still, on the positive side, some bullish catalysts may boost the stock in the near term.
Dell stock slips amid AI jitters
Dell Technologies stock is falling, mirroring the performance of other companies in the artificial intelligence industry. Nvidia stock dropped by 2.77% in the premarket session, while Micron and SanDisk were down by over 5%. Other top companies in the AI industry were in the red as well.
The ongoing sell-off is happening as investors react to ongoing concerns about the artificial intelligence industry. In a social media post last week, a former Anthropic employee warned that the sector, left unchanged, will lead to human extinction.
Dario Amodei, the founder and CEO of Anthropic, urged the industry to slow down the pace of AI model development, a statement that the heads of SpaceX, OpenAI, and DeepMind leaders supported.
Therefore, there are concerns on how these statements will impact the AI industry. For one, the warnings may lead to more data center cancellations.
However, in reality, these statements will likely have no major impact on Dell and other companies in the industry like Micron, SanDisk, and Kioxia. That’s because the chances of slowing down the investments are negligible since AI companies are seeing elevated competition from American and Chinese companies like Z.ai, DeepSeek, and Moonshot.
Dell Technologies’ business is thriving
The most recent results showed that its business is thriving as demand for AI servers rose. Its revenue jumped by 58% in the second quarter to $47 billion, much higher than what analysts were expecting. The company expects that its annual revenue will jump to $192 billion, up by 69% YoY.
These numbers mean that Dell’s growth has become largely unstoppable since it made over $88 billion in 2024. Most of its growth came from the Infrastructure Solutions Group (ISG), which made over $31.8 billion, up by 89% on a YoY basis. AI-optimized server revenue doubled during the quarter.
The Client Solutions Group’s revenue jumped by 20% in the second quarter to $15 billion, with the commercial client rising by 22% to $13.2 billion.
Most notably, the company, which often is highly conservative, expects that its third-quarter revenue will come in at $49 billion, up by 81% on an annual basis.
This growth has pushed the management to boost its share repurchases since it believes that it is highly undervalued.
Dell stock technical analysis
Dell Technologies stock | Source: TradingView
The daily chart shows that Dell shares have been in a strong bull run in the past few months and is now hovering around its all-time high. It has rallied from a low of $356 in July to a high of $567.
Dell has jumped above the important resistance level of $513, its highest level on August 13. It remains above the 50-day and 100-day Exponential Moving Averages (EMA). It also remains above the Supertrend indicator.
Therefore, the most likely scenario is where it retreats and retests the support at $513 and then resumes the upward trend, potentially to $600.
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