Dell Technologies (DELL) Stock Gains Momentum as Analysts Boost Targets on $95B AI Pipeline

Key Takeaways

Table of Contents

TD Cowen elevated Dell’s (DELL) price target from $500 to $550 while maintaining a Hold rating.
Susquehanna maintains a Positive outlook with a $700 price target, highlighting AI inferencing as a significant growth driver.
The company reports a $95 billion AI server backlog, with the majority being noncancelable orders.
Truist Securities increased its price target to $505, while RBC Capital initiated coverage with an Outperform rating.
InvestingPro data reveals Dell achieved 49% revenue expansion over the previous year, fueled by AI demand.

Shares of Dell Technologies (DELL) stock hovered near $543.95 during Tuesday’s trading session, registering a modest 0.10% increase. The price movement followed a wave of analyst upgrades released throughout the week.

Dell Technologies Inc., DELL

TD Cowen increased its price objective for Dell shares to $550, up from the previous $500 mark. Analyst Krish Sankar maintained a Hold rating alongside the revised target.

The adjustment came after recent discussions with Paul Frantz, Dell’s head of investor relations. Sankar noted that Dell’s AI server order backlog has reached $95 billion, with the bulk consisting of noncancelable commitments.

This substantial backlog provides Dell with significant negotiating power among leading neocloud service providers. Sankar indicated that order patterns during the latter half of 2026 will be critical for assessing potential upside in 2027 AI projections.

Sankar also highlighted profitability considerations. An increased proportion of AI CPU rack configurations would enhance margins, given Dell’s current gross margin of approximately 20%.

Massive AI Pipeline Drives Positive Analyst Sentiment

Susquehanna’s Mehdi Hosseini echoed a bullish perspective. He maintained a Positive rating on Dell shares while reaffirming his $700 price objective.

Hosseini suggested that expanding AI inferencing requirements could provide substantial momentum for Dell’s conventional server operations. His projections anticipate traditional server revenue will double during fiscal 2027 and maintain double-digit growth rates through fiscal 2029.

He believes Dell may surpass the 100% year-over-year growth guidance already provided by management for fiscal 2027. Hosseini attributes this optimism to emerging agentic AI applications and increasing CPU requirements.

Hosseini provided detailed calculations in his analysis. He projects approximately $0.10 in traditional server revenue for each $1 of accelerated compute revenue from neocloud clients, and $0.23 per dollar for enterprise customers.

When applied to Dell’s $74 billion AI server revenue projection for fiscal 2027, this formula suggests roughly $7 billion in associated traditional compute requirements. That represents a modest portion of the estimated $40 billion traditional server revenue anticipated for the year, with inferencing accounting for approximately 18%.

Hosseini anticipates this percentage will exceed 20% during fiscal 2028 and 2029. He contends the broader market opportunity remains undervalued beyond the fiscal 2027 timeframe.

Additional Analyst Coverage

TD Cowen wasn’t alone in adjusting its forecast this week. Truist Securities lifted its Dell price objective to $505, emphasizing a backlog that provides revenue visibility extending into fiscal 2028.

RBC Capital launched coverage on Dell with an Outperform designation. The firm highlighted Dell’s strategic positioning within AI infrastructure investment as a primary catalyst.

Goldman Sachs also identified Dell among several technology enterprises experiencing tangible financial benefits from AI implementations. The firm noted these advantages are expanding into revenue-producing operations, beyond mere capital expenditure.

Regarding potential challenges, Sankar identified memory supply limitations in 2027 as a factor requiring monitoring. He also mentioned Dell’s client solutions division confronts near-term and medium-term pressures as IT budgets reallocate from personal computers toward infrastructure investments.

InvestingPro data indicates 22 analysts have upgraded their earnings projections for Dell’s upcoming reporting period. However, InvestingPro’s Fair Value analysis suggests the stock may be valued above its calculated intrinsic worth at present price levels.

Two Dell subsidiaries recently finalized a $5 billion senior unsecured notes issuance. The offering comprised multiple tranches featuring varying maturity dates and interest rates.

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