Dell Technologies Inc. (DELL) recorded a 5.11% decline in the 24-hour period ending during the night session on Wednesday, extending a sharp selloff that has seen the stock lose significant ground amid mounting concerns over the profitability of its artificial intelligence server business and a broader technology sector rout.

The drop came as investors grew increasingly wary about the sustainability of Dell’s hardware margins within its Infrastructure Solutions Group. While the company has captured a large share of the AI server market, the high cost of securing advanced processing units and aggressive pricing needed to win cloud service provider contracts are weighing on operating income. Institutional investors are recalibrating expectations as the focus shifts from revenue growth to the quality of earnings, triggering a de-risking phase for the stock.

Broader sector headwinds also contributed to the decline. A wave of selling hit AI-linked stocks after reports emerged that a Chinese state-backed company is mass-producing a chip-making tool that had long been a monopoly of ASML. This news intensified competition fears and spread across the semiconductor and hardware space, with Dell falling alongside other AI infrastructure names. Persistent worries about the longevity of the technology capital expenditure cycle and high interest rates further dampened sentiment, pushing the stock through key technical support levels.