TLDR
- TD Cowen raised Dell’s (DELL) price target to $550 from $500, keeping a Hold rating.
- Susquehanna kept its Positive rating and $700 price target, calling AI inferencing a “tailwind” for server revenue.
- Dell holds a $95 billion AI server backlog, mostly noncancelable.
- Truist raised its target to $505, and RBC started coverage with an Outperform rating.
- Dell’s AI momentum helped drive 49% revenue growth over the past year, according to InvestingPro data.
Dell Technologies (DELL) stock traded around $543.95 on Tuesday, up about 0.10% on the day. The move came as several Wall Street firms updated their outlooks this week.
TD Cowen raised its price target on Dell to $550 from $500. Analyst Krish Sankar kept a Hold rating on the stock.
The update followed meetings last week with Dell’s investor relations head, Paul Frantz. Sankar said Dell’s AI server backlog now sits at $95 billion, and most of it is noncancelable.
That backlog gives Dell strong leverage with major neocloud providers. Sankar said orders in the second half of 2026 could offer clues on how much upside is left for 2027 AI forecasts.
Sankar also pointed to margins. A higher mix of AI CPU racks would help profitability, since Dell’s gross margin sits near 20% right now.
AI Backlog Fuels Analyst Optimism
Susquehanna analyst Mehdi Hosseini took a similar view. He reiterated a Positive rating on Dell and kept his price target at $700.
Hosseini said rising AI inferencing demand could become a tailwind for Dell’s traditional server business. He expects traditional server revenue to double in fiscal 2027 and keep growing at a double-digit rate through fiscal 2029.
He also thinks Dell could beat the 100% year-over-year growth guidance management already gave for fiscal 2027. Hosseini credits agentic AI and rising CPU demand for that view.
Hosseini broke down the math in his note. He estimates $0.10 of traditional server revenue for every $1 of accelerated compute revenue from neocloud customers, and $0.23 for enterprise customers.
Applying that to Dell’s $74 billion AI server revenue guide for fiscal 2027 implies about $7 billion in related traditional compute demand. That’s a small slice of the $40 billion traditional server revenue estimate for the year, with inferencing making up just 18% of it.
Hosseini expects that share to climb above 20% in fiscal 2028 and 2029. He says the broader opportunity remains underappreciated once fiscal 2027 passes.
Other Analysts Weigh In
TD Cowen wasn’t the only firm to lift its target this week. Truist Securities raised its Dell price target to $505, pointing to a backlog that stretches visibility into fiscal 2028.
RBC Capital started coverage on Dell with an Outperform rating. The firm cited Dell’s position in AI infrastructure investment as a key reason.
Goldman Sachs also flagged Dell as one of several tech companies seeing real financial gains from AI deployments. The firm said those gains are expanding into revenue-generating workflows, not just spending.
On the risk side, Sankar flagged memory constraints in 2027 as a concern to watch. He also said Dell’s client solutions group faces near-term and mid-term headwinds as IT budgets shift from PCs toward infrastructure.
InvestingPro data shows 22 analysts have revised their earnings estimates higher for Dell’s upcoming period. Still, InvestingPro’s Fair Value model suggests the stock may be trading above its estimated worth at current levels.
Two Dell subsidiaries recently completed a $5 billion senior unsecured notes offering. The deal included several tranches with different maturities and interest rates.
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