AI-driven memory price surge lifts storage stocks but pressures server margins, splitting sector performance mid-session.
Dell Technologies shares fell 6% to $407 in midday trading Thursday, extending losses after reporting a drop in gross margin from 21% to 18% last quarter. Rising memory costs threaten further margin compression ahead of August earnings, analysts said.
Western Digital surged 5% to $678, riding a broader rally in memory and storage stocks following Micron’s stronger-than-expected quarterly results. AI data center demand continues to validate elevated storage valuations, lifting peers like SanDisk and Western Digital.
Both stocks remain strong year-to-date performers, with Dell up 224% and Western Digital up 296%, but today’s divergence highlights the split between memory suppliers and hardware assemblers.