Dell shares jump as Wall Street lifts price targets on AI server demand

Dell shares jump as Wall Street lifts price targets on AI server demand

Wed, September 2, 2026 at 9:18 PM GMT+3 2 min read

• DELL +4.91%

Shares of Dell Technologies Inc (NASDAQ:DELL) climbed more than 10% Wednesday after the company posted broad-based earnings strength and raised its full-year guidance well above expectations, driven by surging demand for AI servers.

Fiscal second-quarter revenue was $47 billion, up 58% year over year, beating the $46 billion consensus estimate. The company guided full-year revenue to $192 billion, up from a prior outlook of $167 billion.

Bank of America reiterated its Buy rating and raised its price objective to $600 from $505, citing Dell's position as a beneficiary of agentic AI adoption across NeoClouds, sovereign, enterprise and edge computing.

BofA said demand continues to outpace supply by roughly 30% in fiscal 2027, with an even larger gap expected in fiscal 2028, creating a favorable pricing environment.

Dell's AI server business was a standout, with revenue, orders and backlog all coming in well above BofA's estimates. AI server revenue reached $16.4 billion, orders totaled $60.9 billion and backlog nearly doubled quarter over quarter to $95 billion. Dell raised its fiscal 2027 AI server revenue guidance by $14 billion to $74 billion.

Infrastructure Solutions Group operating margin grew 620 basis points year over year to 15.0%. In the Client Solutions Group, revenue grew 20% year over year, with commercial revenue up 22% for an eighth consecutive quarter of growth.

BofA raised its fiscal 2027 revenue and EPS estimates to $197 billion and $26.35, respectively, from $178 billion and $19.56.

UBS also raised its price target, to $500 from $455, but maintained a Neutral rating, citing limited visibility into whether growth can be sustained into fiscal 2028 and 2029. The firm noted shares were trading at 17.5 times the midpoint of Dell's fiscal 2027 EPS guidance of $25.50, reflecting investor concern that AI-driven compute and storage growth could slow in coming years.

UBS raised its fiscal 2027 and 2028 EPS estimates to $26 and $29.86, from $19.41 and $21.90, applying a lower multiple of 16 times, down from 20 times, citing durability concerns tied to steep industrywide price increases.

Traditional server and networking revenue reached $10.53 billion, up 122% year over year, which UBS attributed to enterprise data center modernization and growing demand for compute capacity to support agentic AI workloads.