Key Takeaways
- GF Securities’ Jeff Pu downgraded Dell Technologies from Buy to Hold following a nearly 200% stock rally
- Pu kept his $445 price target intact but expressed concerns over valuation at more than 20x FY28 consensus earnings
- Dell director Lynn Radakovich offloaded $5.06 million in shares on June 22, exercising options at $31.14 and selling at $421.00
- Analyst warned that Super Micro may capture market share from Dell in SpaceX deployments beginning in 2027
- Shares traded around $434 Thursday, declining approximately 5% following the rating cut
Dell Technologies (DELL) shares tumbled more than 5% Thursday, trading near $434 after analyst Jeff Pu of GF Securities downgraded the stock from Buy to Hold.
The rating cut comes on the heels of a massive rally that has seen Dell’s shares soar nearly 200% since the technology giant unveiled its fiscal fourth-quarter earnings in February.
While Pu maintained his $445 price target, he indicated the current risk-reward profile has become less appealing.
“While recent GB300/HGX orders provide near-term tailwinds, we see limited upside amid already elevated expectations,” Pu stated in his note. He pointed out that market participants already anticipate an AI revenue revision exceeding $70 billion, along with corresponding increases to overall revenue and earnings per share.
With the stock trading at over 20x consensus fiscal 2028 earnings—or roughly 25x for AI operations and 15x for core business using sum-of-the-parts analysis—the analyst concluded the valuation doesn’t justify maintaining a bullish stance.
Competitive Threats Cast Shadow Over Future Growth
Pu also highlighted a significant long-term risk that contributed to Thursday’s selloff. He anticipates Super Micro (SMCI) will capture meaningful market share in SpaceX’s upcoming gigawatt-scale deployment cycle scheduled to begin in 2027.
Dell currently enjoys a dominant supplier relationship with SpaceX and serves as the exclusive supplier to CoreWeave (CRWV). However, Pu indicated both clients are exploring an ODM-direct purchasing model, which could gradually erode Dell’s competitive advantage.
This potential shift represents a risk factor that investors hadn’t fully incorporated into their valuations, amplifying the day’s decline.
Adding to the day’s news, a regulatory filing disclosed that Dell director Lynn Radakovich sold $5.06 million in company stock on June 22. The transaction involved exercising options priced at $31.14 per share before immediately selling 12,022 shares at $421.00 each.
The sale was executed through a pre-established Rule 10b5-1 trading plan that Radakovich adopted in March 2026. After the transaction, she continues to hold 25,267 shares directly and maintains options on an additional 51,979 shares.
Impressive Rally Creates High Expectations
Dell has delivered exceptional performance this year. Shares have surged over 247% year-to-date, pushing the company’s market capitalization to approximately $277 billion.
Recent corporate milestones include the introduction of its PowerEdge XE8812 server featuring Nvidia’s Vera Rubin NVL4 architecture, capable of supporting up to 144 GPUs per rack. The company also won a substantial $1.4 billion U.S. Air Force contract for Microsoft enterprise software licenses.
Additionally, Dell closed a $3 billion senior notes offering distributed across three tranches with maturity dates in 2031, 2034, and 2037.
Despite these achievements, some market observers have raised concerns about Dell’s substantial debt burden and negative equity position as potential vulnerabilities should credit markets tighten.
Dell’s stock declined approximately 5.36% Thursday afternoon, hovering around $434 per share.
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