Michael Dell, the CEO and founder of Dell Technologies, faced the largest single-day decline in his wealth due to a sharp drop in Dell shares. According to Fortune, Dell’s net worth plummeted by $11.7 billion to $107.1 billion on Friday, as Dell Technologies Inc. shares plunged 18% in New York. Dell is projected to lose more than $21 billion in market value if the losses persist.
The decline in Dell’s stock was attributed to investor concerns over the company’s lower-than-expected artificial intelligence server backlog and anticipated margin declines.
Following this decline, the 59-year-old tech mogul now holds the 13th position on the Bloomberg Billionaires Index, with a net worth of $107.1 billion.
It’s noteworthy that Dell’s wealth is predominantly derived from Dell Technologies Inc., a company he established over four decades ago while attending the University of Texas.
Another significant contributor to his net worth is his stake in Broadcom Inc., whose shares also experienced a decline on Friday.
In early March, he entered the prestigious club of individuals with fortunes exceeding $100 billion, driven by the surging demand for AI computing equipment, which propelled Dell’s shares to an all-time high. The increasing need for high-performance servers by large corporations to train and execute demanding generative AI tasks has boosted the demand for products offered by Dell and a select few other companies.
According to CNBC, Dell announced its first-quarter earnings on Thursday, surpassing analysts’ expectations for both earnings and sales. The company has established itself as one of the leading suppliers of artificial intelligence servers. However, its shares experienced a decline of over 15% in after-hours trading due to concerns that Dell’s AI servers are not yet generating substantial profits for the company.
Prior to Thursday’s earnings report, Dell shares had surged by over 100% in 2024.
“Relative to very high expectations, Dell’s Q1 25 results were disappointing,” remarked Toni Sacconaghi, an analyst at Sanford Bernstein. He highlighted that a decline in adjusted operating margin during the quarter raises “concerns that AI servers are being sold at near-zero margins.”
During a post-earnings call, Dell executives noted that gross margins have faced challenges due to “more competitive pricing environment and a higher AI-optimized server mix.”