Dell and Nebius flagged as buying opportunities after AI stock selloff

Dell Technologies and Nebius Group are identified as potential buying opportunities following a sharp decline in AI-linked shares, a move driven by inflation data and rising bond yields. The Nasdaq Composite fell 1.9% as investors reacted to annual core inflation reaching 2.6%, above the 2.5% forecast, which prompted traders to price in possible Federal Reserve rate hikes. This environment increased the cost of borrowed money, a key factor for data center expansion, while reports that China's CXMT has progressed on chip designs weighed on memory stocks.

Within the broader selloff, CoreWeave took the heaviest hit, dropping 15.5% as attention turned to its climbing bond yields. Dell Technologies and Nebius Group shed more than 11% and 10%, respectively. Unlike CoreWeave, whose decline is tied to its own debt costs, Dell and Nebius are characterized as victims of the wider market pressure rather than specific customer pullbacks.

Dell's second-quarter results for fiscal 2027 show the AI boom feeding directly into its business. The company recorded a record $60.9 billion in AI server orders and $16.4 billion in AI server sales, ending the quarter with a $95 billion backlog. Dell states its pipeline of potential deals is several times larger than that backlog. The customer base has expanded to more than 6,500 AI customers across neoclouds, governments, and businesses. Management believes only 10-15% of companies have made a serious move into AI, indicating further growth potential.

Dell has raised its fiscal year forecast to expect about $74 billion in AI server revenues, roughly triple last year's figure. Total revenue guidance increased by $25 billion to $192 billion, with earnings per share guided at $25.50. The company carries a Zacks Rank #1 (Strong Buy), with consensus estimates for fiscal 2027 and 2028 EPS implying year-over-year increases of 153% and 16%, respectively.

Nebius Group secured four significant contracts during the second quarter of 2026, each valued at over $1 billion. The company has also partnered with Palantir to provide computing resources to commercial clients.

Revenues in the last reported quarter rose 454% from a year earlier to $582 million, with 98% derived from AI services. The annualized run-rate reached $3 billion, and adjusted EBITDA swung to a $236 million profit from a $21 million loss a year ago, representing a 41% margin.

To manage the high capital requirements of data center construction, Nebius is leaning on partners who finance, build, and run facilities, reducing its own capital needs. Customer prepayments are expected to bring in more than $9 billion upfront in 2026. Management expects margins to improve further once its own data centers come online, mainly from the second half of 2027. Nebius reaffirmed its 2026 guidance for $3-$3.4 billion in revenues and a 40% adjusted EBITDA margin. The company carries a Zacks Rank #2 (Buy), with consensus estimates for 2026 and 2027 sales implying year-over-year increases of 529% and 267%, respectively.