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AI Stocks Bleed as Inflation Bites: Any Buying Opportunities?
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Key Takeaways
AI stocks slid as hotter inflation and rising bond yields pressured tech, with DELL and NBIS falling over 10%.
Dell's $95B AI server backlog and $74 billion revenue forecast highlight robust demand and growth prospects.
NBIS posted 454% sales growth in Q2, while customer prepayments and partnerships help ease funding pressures.
Yesterday was a rough day for tech investors. The Nasdaq Composite lost 1.9% as AI-linked shares sold off. The hardest hit were the companies supplying the AI buildout: chipmakers, server makers and cloud providers. The Magnificent Seven also declined, though by a smaller margin.
Several pressures converged. Inflation data came in above forecasts, leading traders to price in possible Federal Reserve rate hikes. Annual core inflation reached 2.6%, above the 2.5% forecast. Bond yields climbed, and with them the cost of the borrowed money that data center expansion depends on. At the same time, memory stocks have been sinking after reports that China’s CXMT has progressed on its chip designs, which could mean a market flooded with supply and squeezed margins. Underneath it all lies a lingering question over whether the heavy spending on AI can be funded sustainably.
Within the AI trade, a few names took far heavier hits than the rest. CoreWeave (CRWV - Free Report) took the biggest hit, down 15.5% after its climbing bond yields drew attention. Supported by NVIDIA, the company provides rented computing capacity to AI customers. Dell Technologies (DELL - Free Report) and Nebius Group (NBIS - Free Report) shed more than 11% and 10%, respectively.
So, is there anything worth buying here? Not every drop is a bargain. But when a stock falls 10% or more mostly because the whole market is under pressure, and not because customers are pulling back, it deserves a closer look. While CoreWeave’s fall is tied to its own debt costs, which makes it riskier, Dell and Nebius look more like victims of the wider selloff. In fact, both these stocks are worth buying on the dip now. Here’s why.
Dell
Dell’s latest results show the AI boom feeding straight into its business. In the second quarter of fiscal 2027, it took in a record $60.9 billion of AI server orders and recorded $16.4 billion in AI server sales. It ended the quarter with a $95 billion backlog, meaning a large stack of orders is still waiting to be delivered. Dell says its pipeline of potential deals is several times bigger than that.
The customer base is widening too. More than 6,500 AI customers now buy from Dell, spread across neoclouds, governments and ordinary businesses. That mix matters because Dell doesn’t depend on one type of buyer. Management also believes most companies are still at the starting line, with only 10-15% having made a serious move into AI.
Dell has raised its forecast to match. It now expects about $74 billion in AI server revenues this fiscal year, roughly triple last year’s. Total revenue guidance increased by $25 billion to $192 billion, and earnings per share are guided to be $25.50.
Short-term swings aside, the bigger picture favors Dell. Its order book is full, its customers are diverse, and the shift to AI infrastructure is only getting started.
The company sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for DELL’s fiscal 2027 and 2028 EPS implies a year-over-year uptick of 153% and 16%, respectively.
Nebius is seeing strong demand for its AI cloud services. In the second quarter of 2026, it signed four major deals averaging more than $1 billion each. NBIS has also teamed up with Palantir to supply computing power to commercial customers.
The growth shows in the numbers. In the last reported quarter, revenues rose 454% from a year earlier to $582 million, and almost all of it (98%) came from AI services. Its annualized run-rate reached $3 billion. Profitability improved sharply too. Adjusted EBITDA swung to $236 million from a $21 million loss a year ago, a 41% margin. Management expects margins to improve further once its own data centers come online, mainly from the second half of 2027.
Like CoreWeave, Nebius needs a lot of money to build its data centers, so higher borrowing costs matter here too. The company has a few ways of limiting that exposure. It is leaning on partners who finance, build and run facilities, so Nebius needs less of its own capital. Customer prepayments are also expected to bring in more than $9 billion upfront in 2026. That eases the pressure from higher borrowing costs.
Nebius reaffirmed its 2026 guidance, including $3-$3.4 billion in revenues and a 40% adjusted EBITDA margin. With power capacity targets rising, the long-term runway looks wide.
The company carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for NBIS’ 2026 and 2027 sales implies a year-over-year uptick of 529% and 267%, respectively.
View the Zacks #1 Rank List
Image: Bigstock
AI Stocks Bleed as Inflation Bites: Any Buying Opportunities?
Key Takeaways
Yesterday was a rough day for tech investors. The Nasdaq Composite lost 1.9% as AI-linked shares sold off. The hardest hit were the companies supplying the AI buildout: chipmakers, server makers and cloud providers. The Magnificent Seven also declined, though by a smaller margin.
Several pressures converged. Inflation data came in above forecasts, leading traders to price in possible Federal Reserve rate hikes. Annual core inflation reached 2.6%, above the 2.5% forecast. Bond yields climbed, and with them the cost of the borrowed money that data center expansion depends on. At the same time, memory stocks have been sinking after reports that China’s CXMT has progressed on its chip designs, which could mean a market flooded with supply and squeezed margins. Underneath it all lies a lingering question over whether the heavy spending on AI can be funded sustainably.
Within the AI trade, a few names took far heavier hits than the rest. CoreWeave (CRWV - Free Report) took the biggest hit, down 15.5% after its climbing bond yields drew attention. Supported by NVIDIA, the company provides rented computing capacity to AI customers. Dell Technologies (DELL - Free Report) and Nebius Group (NBIS - Free Report) shed more than 11% and 10%, respectively.
So, is there anything worth buying here? Not every drop is a bargain. But when a stock falls 10% or more mostly because the whole market is under pressure, and not because customers are pulling back, it deserves a closer look. While CoreWeave’s fall is tied to its own debt costs, which makes it riskier, Dell and Nebius look more like victims of the wider selloff. In fact, both these stocks are worth buying on the dip now. Here’s why.
Dell
Dell’s latest results show the AI boom feeding straight into its business. In the second quarter of fiscal 2027, it took in a record $60.9 billion of AI server orders and recorded $16.4 billion in AI server sales. It ended the quarter with a $95 billion backlog, meaning a large stack of orders is still waiting to be delivered. Dell says its pipeline of potential deals is several times bigger than that.
The customer base is widening too. More than 6,500 AI customers now buy from Dell, spread across neoclouds, governments and ordinary businesses. That mix matters because Dell doesn’t depend on one type of buyer. Management also believes most companies are still at the starting line, with only 10-15% having made a serious move into AI.
Dell has raised its forecast to match. It now expects about $74 billion in AI server revenues this fiscal year, roughly triple last year’s. Total revenue guidance increased by $25 billion to $192 billion, and earnings per share are guided to be $25.50.
Short-term swings aside, the bigger picture favors Dell. Its order book is full, its customers are diverse, and the shift to AI infrastructure is only getting started.
The company sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for DELL’s fiscal 2027 and 2028 EPS implies a year-over-year uptick of 153% and 16%, respectively.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Nebius
Nebius is seeing strong demand for its AI cloud services. In the second quarter of 2026, it signed four major deals averaging more than $1 billion each. NBIS has also teamed up with Palantir to supply computing power to commercial customers.
The growth shows in the numbers. In the last reported quarter, revenues rose 454% from a year earlier to $582 million, and almost all of it (98%) came from AI services. Its annualized run-rate reached $3 billion. Profitability improved sharply too. Adjusted EBITDA swung to $236 million from a $21 million loss a year ago, a 41% margin. Management expects margins to improve further once its own data centers come online, mainly from the second half of 2027.
Like CoreWeave, Nebius needs a lot of money to build its data centers, so higher borrowing costs matter here too. The company has a few ways of limiting that exposure. It is leaning on partners who finance, build and run facilities, so Nebius needs less of its own capital. Customer prepayments are also expected to bring in more than $9 billion upfront in 2026. That eases the pressure from higher borrowing costs.
Nebius reaffirmed its 2026 guidance, including $3-$3.4 billion in revenues and a 40% adjusted EBITDA margin. With power capacity targets rising, the long-term runway looks wide.
The company carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for NBIS’ 2026 and 2027 sales implies a year-over-year uptick of 529% and 267%, respectively.