20 Worst Performing AI Stocks of Last Week

14. Dell Technologies Inc. (NYSE:DELL)

Weekly Decline: 11.65%

Number of Hedge Fund Holders: 88

Dell Technologies Inc. (NYSE:DELL) is an information technology company that sells and supports various comprehensive and integrated solutions, products, and services. It is based in Round Rock, Texas.

Dell Technologies Inc. (NYSE:DELL) is garnering increased investor attention because it is poised to benefit from increasing investment in AI servers. For instance, several big tech names, such as Amazon and Microsoft, are making bigger investments in AI data centers.

Regardless of this, Dell Technologies Inc. (NYSE:DELL) does seem to be facing some headwinds, which may explain the recent decline in the stock’s price. One challenge is the exit from its resell business for VMware. Additionally, due to an increase in Dell Technologies Inc.’s (NYSE:DELL) AI-optimized server mix and a more competitive pricing environment, the company also saw a 230 basis point decline in its gross margin, which came in at $5.5 billion. This is a potential red flag for many investors since the general trend seems to signify that the more AI-optimized servers Dell Technologies Inc. (NYSE:DELL) sells, the more its gross profit margin declines.

The primary reason for this trend surrounding Dell Technologies Inc. (NYSE:DELL) is that its main customers, like Amazon, Alphabet, and Microsoft, are all big tech companies with immense negotiating power. This results in these companies negotiating lower prices for AI-optimized servers and data centers, which leads to lower profit margins for Dell Technologies Inc. (NYSE:DELL). Despite this, the company’s CFO has commented that they still expect solid top-line growth in the second half of 2024, so investors following Dell Technologies Inc. (NYSE:DELL) right now should keep all of these considerations in mind as they try to understand the stock’s weekly decline and future growth prospects.

At the end of the second quarter, 88 hedge funds were long Dell Technologies Inc. (NYSE:DELL), with a total stake value of $2.9 billion.