Shares of Dell Applied sciences (DELL) soared 22% on Feb. 27 after the corporate reported robust fiscal This fall earnings and Q1 steering.
In 1984, Michael Dell began the corporate whereas he was a scholar on the College of Texas. Initially centered on promoting PCs, the corporate now sees AI as its greatest alternative.
Dell sells AI-optimized servers and built-in infrastructure that assist corporations run giant language fashions in their very own knowledge facilities.
Nvidia (NVDA) is a key associate of Dell, with Dell’s techniques constructed utilizing Nvidia GPUs.
“Nobody is better at building end-to-end systems of very large scale for the enterprise than Dell,” Nvidia CEO Jensen Huangsaid in 2024.
Dell inventory surged greater than 50% in 2024 available on the market’s excessive expectations for its enterprise round AI. However the inventory is up simply 9.23% in 2025, whereas the S&P 500 rallied 16.39% final 12 months.
Dell inventory is up 17.64% year-to-date.
Getty Photographs
Dell targets $50 billion AI income this 12 months
For the quarter ended Jan. 30, Dell reported adjusted earnings of $3.89 per share, beating Wall Avenue’s estimate of $3.52, knowledge from Investing.com reveals. Income got here in at $33.38 billion, topping the $31.41 billion forecast.
Dell posted document full-year income of $113.5 billion, a 19% improve from the prior 12 months, whereas diluted earnings per share climbed to a document $8.68, up 36% 12 months over 12 months.
Associated: Cathie Wooden buys $7 million of fashionable AI inventory
The corporate expects fiscal 2027 income within the vary of $138 billion to $142 billion, effectively above the $124.7 billion consensus. The midpoint of $140 billion implies about 23% year-over-year progress. It additionally expects diluted EPS to be $11.52 on the midpoint, up 33% from final 12 months.
Dell’s chief working officer, Jeff Clarke, stated the previous 12 months was “a defining year” marked by document full-year income, EPS, and money era. “The AI opportunity is transforming our company,” Clarke said.
Notably, Dell expects revenue from its artificial intelligence servers to reach $50 billion in fiscal 2027, more than double the previous year.
“Our customer base [for AI products] surpassed 4,000, with growth across neo clouds, sovereigns, and enterprise customers—evidence that demand is broadening across all customer types,” Clarke later said in an earnings call.
Dell’s AI server revenue accounts for roughly 21.7% of its total sales in the past year.
Dell operates through two core segments: the Infrastructure Solutions Group, which sells AI-optimized servers, storage and networking for data centers, and the Client Solutions Group, which includes its PC business.
ISG is Dell’s main growth driver, generating about $60.8 billion of the company’s $113.5 billion in revenue last year, up 40%. CSG brought in about $51 billion with growth of around 5%.
Bank of America raises Dell stock price target
Bank of America analyst Wamsi Mohan raised the firm’s price target for Dell to $155 from $135 and maintained a buy rating, according to a Feb. 26 research note sent to TheStreet.
Mohan called Dell’s outlook for the coming year “unexpectedly strong,” however cautioned that current value hikes may begin to weigh on demand. Dell started to lift PC costs final 12 months to offset surging prices.
Related: Bank of America resets Nvidia price target after earnings
“Whereas the close to time period is clearly robust, we’re uncertain of the demand elasticity created by the swift and important value actions taken by Dell,” Mohan wrote.
“We mannequin 2H weaker than 1H, which may show to be finally conservative,” he added.
More Tech Stocks:
- Morgan Stanley sets jaw-dropping Micron price target after event
- Nvidia’s China chip problem isn’t what most investors think
- Quantum Computing makes $110 million move nobody saw coming
Still, the analyst raised his price target based on “robust execution, early innings of enterprise AI adoption and better connect of Dell IP in Storage.” He added that AI demand growth could offset headwinds.
Dell closed at $148.08 on Feb. 27 and is up 17.64% year-to-date.
Associated: Cathie Wooden sends blunt 3-word message on inventory outlook in 2026
