Quick Summary
- TD Cowen increased its Dell (DELL) price objective to $550 from $500 while maintaining a Hold rating on shares.
- Susquehanna maintains its Positive stance with a $700 target, highlighting AI inferencing as a significant driver for server sales.
- The company has secured a $95 billion AI server order book, with the majority being noncancelable commitments.
- Truist Securities lifted its price objective to $505, while RBC Capital initiated coverage with an Outperform recommendation.
- According to InvestingPro statistics, Dell’s AI-driven business helped fuel 49% revenue expansion over the trailing twelve months.
Shares of Dell Technologies (DELL) hovered around $543.95 during Tuesday’s trading session, registering a modest gain of approximately 0.10%. The price movement followed a series of updated assessments from prominent Wall Street research firms released this week.
TD Cowen elevated its price objective for Dell shares to $550, up from a previous $500 target. Research analyst Krish Sankar maintained a Hold rating in the updated report.
The revision came after discussions held last week with Paul Frantz, Dell’s head of investor relations. Sankar noted that Dell’s AI server order backlog has reached $95 billion, with the vast majority representing noncancelable commitments.
This substantial backlog provides Dell with significant negotiating power when working with leading neocloud service providers. According to Sankar, order patterns during the latter half of 2026 will be critical in determining the remaining upside potential for 2027 AI-related projections.
Sankar also addressed profitability dynamics. A greater proportion of AI CPU rack deployments would enhance margins, particularly given that Dell’s current gross margin hovers around 20%.
Massive Order Book Drives Bullish Sentiment
Susquehanna’s analyst Mehdi Hosseini echoed these positive themes. He reaffirmed a Positive rating on Dell shares while maintaining his $700 price objective.
Hosseini highlighted that accelerating AI inferencing requirements could provide substantial support for Dell’s conventional server operations. His forecast anticipates traditional server revenue will double during fiscal 2027 and maintain double-digit percentage growth through fiscal 2029.
He also believes Dell has the potential to surpass management’s existing guidance of 100% year-over-year growth for fiscal 2027. Hosseini attributes this optimistic outlook to agentic AI applications and increasing CPU requirements.
Hosseini provided detailed calculations in his research note. He projects approximately $0.10 in traditional server sales for each $1 of accelerated compute revenue generated from neocloud clients, and roughly $0.23 for enterprise customers.
When applied to Dell’s $74 billion AI server revenue projection for fiscal 2027, this formula suggests approximately $7 billion in associated traditional compute requirements. That represents a relatively modest portion of the anticipated $40 billion in traditional server sales for the fiscal year, with inferencing accounting for roughly 18% of the total.
Hosseini anticipates this percentage will exceed 20% during fiscal 2028 and 2029. He suggests the broader market opportunity remains undervalued beyond the fiscal 2027 timeframe.
Additional Analyst Perspectives
TD Cowen was joined by other research firms in raising price objectives this week. Truist Securities boosted its Dell target to $505, emphasizing an order backlog that provides revenue visibility extending into fiscal 2028.
RBC Capital Markets launched coverage of Dell with an Outperform rating. The firm emphasized Dell’s strategic positioning within AI infrastructure investment as a primary rationale.
Goldman Sachs also identified Dell among several technology companies demonstrating tangible financial benefits from AI implementation. The firm noted these advantages are now expanding into revenue-producing operations, beyond mere capital expenditure.
Regarding potential challenges, Sankar identified memory supply constraints in 2027 as an area requiring monitoring. He also pointed out that Dell’s client solutions division faces near-term and medium-term pressure as corporate IT budgets reallocate from personal computers toward infrastructure investments.
InvestingPro statistics reveal that 22 analysts have increased their earnings projections for Dell’s upcoming reporting period. However, InvestingPro’s Fair Value analysis indicates the stock may be valued above its estimated intrinsic worth at present price levels.
Two Dell subsidiary entities recently finalized a $5 billion senior unsecured notes issuance. The transaction consisted of multiple tranches featuring varying maturity dates and interest rates.
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