How Did Dell Servers With Restricted NVIDIA Chips End Up in China?

On Friday, Dell Technologies Inc.'s stock experienced a significant decline of nearly 9%, reflecting a broader sell-off in the technology sector, as reported by Bloomberg. Concurrently, the Nasdaq fell by 1.68%, and the S&P 500 dropped by 0.75%, marking the Technology sector as the day's worst-performing area. The incident involved Dell servers with restricted NVIDIA H800 chips, which were installed at a Shanghai data center located in China.

According to Bloomberg's investigation, the servers were originally purchased by Aperia Cloud Services, a Singapore-based company, from Dell. These NVIDIA chips had been restricted from sale to China since 2023, leading to concerns over potential unauthorized diversion. Dell had ceased selling and supporting Aperia International in February 2025 due to these concerns.

The revelation highlights the complexities surrounding U.S. export restrictions on advanced artificial intelligence chips. Dell is set to release its quarterly earnings on November 24, with analysts projecting earnings of $6.55 per share, compared to $2.59 per share a year earlier. Revenue is expected to be $49.21 billion, up from $27 billion a year ago.

Currently, Dell trades at a price-to-earnings ratio of 21.6 and carries a consensus Buy rating among analysts, with an average price target of $584.76. However, in recent weeks, Dell's stock has faced challenges; Barclays downgraded the company to Equal-Weight on October 14 and lowered its price forecast to $574. Mizuho raised its price forecast to $650 on October 6, while maintaining an Outperform rating.

TD Cowen also raised its price forecast to $550 on September 29, maintaining a Hold rating. The stock closed at $338.58 on Friday, down 8.78% according to Benzinga Pro data.