Wall Street loves a good growth story—right up until the growth story asks for another extension cord and a multibillion-dollar loan. On October 30, the AI trade received a costly reminder that the future does not come with free installation. Reuters reported that a technology selloff dragged MSCI’s global index down 1.5%, as results from Intel and Amazon put the cash demands of AI spending under an increasingly unforgiving spotlight. Intel plunged 28.6%, while the Philadelphia semiconductor index shed more than 7%, marking its biggest one-day decline since late June. Alphabet had already rattled investors a day earlier, falling 12.6% after reporting that AI spending had pushed cash flow into negative territory. Artificial intelligence still promised to change the world. Shareholders were beginning to ask whether it could start by finding a cheaper contractor.
The nerves had been building well before that selloff. Reuters reported on October 15 that South Korea’s KOSPI index, home to some of the world’s largest chipmakers, dropped roughly 8% in a single session. Saxo Bank chief investment strategist Charu Chanana suggested that the Asian retreat reflected a repricing of the cost of capital more than a sudden deterioration in technology fundamentals. Investors had not necessarily stopped believing in AI. They had simply reached the part of the relationship where someone asks about outstanding debts.
Interest rates help explain why Wall Street’s enthusiasm has started bringing a calculator to the presentation. Bloomberg reported on October 4 that benchmark 10-year Treasury yields were near 5.3%. Franklin Templeton Institute head market strategist Chris Galipeau said the conversation would change if yields reached 6%. At that level, investors would have another demanding benchmark against which to judge ambitious growth plans. Computing power might keep getting more impressive, but the borrowing costs would be doing some heavy lifting of their own.
For the companies funding the expansion, the bills are becoming too large to hide behind a slide titled “Long-Term Opportunity.” Bloomberg Intelligence analyst Robert Schiffman said hyperscalers including Meta, Amazon, Alphabet, Microsoft, and Oracle now face cash requirements far beyond what they generate, pushing them toward debt markets. AI can draft a business plan, summarize a balance sheet, and produce an encouraging speech in seconds. Persuading a lender to accept “enormous potential” as a monthly payment remains a work in progress.
Oracle is among the companies Schiffman highlighted, and its selloff presents a question worth examining. Why does Wall Street remain so supportive when the share price appears to have filed a formal objection? The answer requires a closer look at how expectations for future growth stack up against the expense of delivering it.
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For chipmakers, financing is only one item on the growing list of headaches. Competition has arrived, and it has no intention of waiting politely outside. Bloomberg reported on October 13 that the KOSPI fell 5.5% in a single day after China’s CXMT announced a memory-chip breakthrough, challenging the bullish outlook for its global peers. Investors already weighing the cost of expanding production suddenly had another calculation to make. Even if demand lives up to expectations, how much of the profit will still be theirs once competitors finish helping themselves?
The same report said Broadcom chief executive Hock Tan compared the approach of some AI investors to gambling and warned that the industry could encounter funding limits. Coming from a major industry executive, that is the sort of observation that can make a roomful of optimists sit a little straighter. Promising technology still needs financing, and financing still requires someone willing to examine the numbers and sign the check. A compelling presentation may earn applause. Construction crews generally prefer a bank transfer.
Nvidia sits at the center of this debate. Its role in AI makes it a natural focal point for both confidence in future demand and concern about how long customers can sustain their spending. Investors are watching the appetite for its computing power alongside the financial capacity of the companies buying it. Selling the equipment for a gold rush can be an attractive business, provided the prospectors can keep paying for their orders.
Caution is also surfacing among the institutions helping finance the expansion. The same Bloomberg report said JPMorgan Chase and Goldman Sachs took the rare step of limiting their exposure to a loan for AI startup Volta Infrastructure Holdings. In Asia, the collapse of Nvidia-backed data center operator Firmus Grid’s initial public offering has added to investor scrutiny of AI deals built around future earnings. Those profits may eventually arrive, but investors increasingly want a timetable with something more specific than “please remain excited.”
Beneath the futuristic machinery, investors face a decidedly old-fashioned task: finding businesses whose growth prospects justify the asking price. A falling stock can offer an opportunity, but a red price tag alone does not make it a bargain. The earnings outlook, financing needs, and competitive position still deserve inspection before anyone heads to the checkout. With that in mind, we screened for companies pairing relatively low forward earnings multiples with expectations for meaningful sales growth—looking for businesses where the numbers can carry their share of the sales pitch.
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Our Methodology
For this article, we screened our database of 1,006 hedge funds for stocks trading at a forward price-to-earnings ratio below 15 and carrying expected forward revenue growth of at least 15%, pairing a valuation filter with a sales-growth requirement. From the qualifying companies, we selected the 10 largest by market capitalization and ranked them in ascending order by the number of hedge funds holding stakes in each as of Q2 2026.
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Dell Technologies Inc. (NYSE:DELL)
Market capitalization: $261.88 billion
Forward P/E: 13.30
Expected forward revenue growth: 34.15%
Number of hedge fund holders: 77
A $95 Billion Backlog Gives the AI Story Some Weight
Dell Technologies Inc. (NYSE: DELL) is bringing something more substantial than an AI presentation to the investment debate: an enormous order book. In its September 1 fiscal second-quarter release, the company reported $47 billion in revenue, up 58% year over year, alongside adjusted diluted earnings of $7.04 per share, up 203%. AI server orders reached $60.9 billion, while AI server revenue totaled $16.4 billion and the outstanding backlog climbed to $95 billion. Those figures describe different stages of the sales process, an important distinction when enthusiasm runs ahead of accounting. Orders signal demand; delivered systems generate revenue; collecting the money completes the job.
The expansion also reaches beyond the machines carrying the AI label. Traditional server and networking revenue rose 122% to $10.5 billion, while storage revenue increased 26% to $4.9 billion. On the earnings call, management linked demand to data center modernization, including better power efficiency, consolidation, and the need to support new workloads. That broadens the investment case: customers upgrading an entire computing environment can purchase several categories of equipment along the way. It also gives investors a more useful question than whether AI spending remains fashionable. The question is whether the company can keep converting that wider demand into profitable shipments without letting component constraints dictate the schedule.
Chief financial officer David Kennedy described the quarter as delivering “record revenue, record EPS and a record $4.3 billion returned to shareholders.” Management raised fiscal 2027 revenue guidance to $192 billion, an increase of $25 billion from its previous outlook. For investors researching undervalued growth stocks, the supplied forward earnings multiple offers a potentially interesting entry point, provided those earnings expectations hold. The backlog is encouraging, but it is not cash already sitting in the bank. Delivery timing, customer readiness, and working-capital requirements remain essential checks. A very large order book is a good problem to have; financing and fulfilling it still require very good execution.
Ranking rationale: Dell Technologies Inc. (NYSE: DELL) ranks tenth because 77 hedge funds held stakes in the supplied Q2 2026 dataset, the lowest count among these ten selections. Its screening appeal combines a 13.30 forward P/E with 34.15% expected revenue growth, supported operationally by its expanding infrastructure business.
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Disclosure: No material interests to disclose. This article was originally published on Global Market Bulletin.
