TLDR
- Dell Technologies raised its long-term annual revenue growth target to 7-9%, up from 3-4%, citing strong AI infrastructure demand
- The company nearly doubled its annual earnings per share growth target to 15% and extended its 10% annual dividend growth commitment through fiscal 2030
- Dell reported $20 billion in revenue from its AI business over the past two years
- Wall Street analysts from Bank of America, Citi, Morgan Stanley, JPMorgan and Mizuho raised price targets following the updated outlook
- Some analysts expressed concerns about uncertain AI server adoption rates and pressure on profit margins from higher production costs
Dell Technologies stock closed 9% higher on Wednesday at around $165 per share. The rally came after the company raised its long-term financial projections.
The Round Rock, Texas-based company now expects annual revenue growth of 7-9% through fiscal 2030. This marks a jump from its previous forecast of 3-4%.
Dell also nearly doubled its adjusted diluted earnings per share growth target to 15% annually. The company attributed the bullish outlook to strong demand for AI infrastructure, including AI-powered servers.
CEO Michael Dell said customers showed strong appetite for the company’s AI-related products and services. The updated guidance also applies to the third quarter and full fiscal year 2026.
Vice chairman and COO Jeff Clarke revealed that Dell’s AI business generated about $20 billion in revenue over the past two years. The company also raised $4.5 billion through a senior note offering this month to strengthen its financial position.
Wall Street responded quickly to the news. Analysts from Bank of America Securities, Citi, Morgan Stanley, JPMorgan, and Mizuho all raised their price targets on Dell stock.
Analyst Price Target Increases
Bank of America analyst Wamsi Mohan lifted his price target to $170, representing a 3.32% upside. He pointed to expected gains from Dell’s AI-enhanced personal computers and the current PC refresh cycle.
JPMorgan analyst Samik Chatterjee maintained an Overweight rating with a price target of $165. However, he noted that Dell’s margins remain a “show-me” story, meaning some investors want to see concrete proof of performance before fully buying into the raised prospects.
Morgan Stanley’s Erik Woodring acknowledged that Dell’s growing AI server business could pressure profit margins due to higher production costs. He believes the company’s efforts to strengthen its core businesses could help support overall margins.
Questions About AI Server Adoption
Not all analysts shared the same enthusiasm. TD Cowen analyst Krish Sankar gave Dell a Hold rating despite raising his price target from $130 to $150.
Sankar expressed uncertainty about how quickly businesses will adopt AI servers. He said this uncertainty could pressure Dell’s finances through higher research and development spending.
The analyst also observed that the current PC refresh cycle appears steady but no different from previous ones. He noted Dell’s operating margins appear stagnant.
Dell extended its commitment to grow its quarterly dividend by 10% or more each year through fiscal 2030. This adds to the company’s appeal for income-focused investors.
The stock has gained 40.4% since the beginning of the year. At current levels, Dell shares have reached a new 52-week high.
Across Wall Street, Dell currently has a Moderate Buy consensus rating based on 11 Buy and six Hold ratings from 17 analysts. The average price target of $160.87 suggests a 2% downside from current levels.
Dell recently announced its new PowerEdge XR8720t server designed for telecom and edge workloads. The product is scheduled for global release in the first quarter of 2026.
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