Dell has emerged as a major AI infrastructure provider: last quarter AI servers generated $16.40 billion in revenue, the company reported AI orders of $60.9 billion and a $95 billion backlog, and the stock has rallied sharply year to date.
A published price target of $594.78 implies 10.66% upside from the current share price of $537.48, paired with a buy recommendation and a 90% confidence level. That target sits just below the 52-week high of $595.51, meaning the investment case hinges on Dell converting its backlog into reported earnings.
Dell’s AI surge and recent results
Dell reported fiscal second-quarter results on September 1, with revenue rising 57.75% to $46.97 billion, ahead of the $44.44 billion estimate. Non-GAAP EPS came in at $7.04 versus a $4.90 consensus. Management raised full-year revenue guidance to $192 billion and non-GAAP EPS guidance to $25.50. The company says it now serves over 6,500 AI customers. Traditional server revenue jumped 122% and storage grew 26%.
The stock has climbed 330.94% year to date and 15.88% over the past month; it fell 5.38% over the past week and sits 9.74% below its 52-week high. The 52-week low was $109.7.
Valuation, analyst views and published price path
A published price target summary lists the current price at $537.48, a price target of $594.78, an upside of 10.66%, a recommendation of BUY and a confidence level of 90%. Analyst ratings cited include 5 Strong Buy, 14 Buy, 9 Hold and zero Sell. Fiscal 2028 EPS consensus rose to $24.6637 from $18.3525 sixty days earlier.
Published multi-year price projections include: 2026 (December) $557.39; 2027 (September) $588.17; 2028 (September) $642.38; 2029 (September) $667.29; 2030 (September) $694.61.
On forward valuation and growth-adjusted multiples, the comparisons given are: Dell forward P/E 21 and PEG 0.646; Hewlett Packard Enterprise forward P/E 14 and PEG 0.498; Super Micro forward P/E 10 and PEG 0.913. The coverage noted that only 5 analysts rate Super Micro Buy or better versus 3 Sell ratings.
Risks: supply constraints and cash flow
Supply shortages were identified as the largest near-term risk, with CEO Jeff Clarke quoted saying: “DRAM, DRAM, DRAM, followed by NAND, NAND, NAND.” Reported free cash flow fell 47.22% to $986 million, and shareholders’ equity was negative at -$1.427 billion. Capital spending rose 83.56% as Dell added capacity. The publication also cited adjusted free cash flow of $8.1 billion and core leverage of 0.8x.
The $95 billion backlog was characterized as providing more than a year of revenue visibility. The published commentary stated the outlook would turn more constructive if Dell holds supply and converts backlog on schedule, and would be viewed more conservatively if memory shortages squeeze margins or free cash flow continued to decline.
For questions or corrections, contact [email protected].
