Dell Technologies (DELL) shares climbed more than 4% on Wednesday, touching a new 52-week high of $562.99, as investors positioned ahead of CEO Michael Dell's appearance at the Goldman Sachs Communacopia + Technology Conference. The stock's rally reflects growing confidence in the company's pivot toward AI infrastructure, a shift that has transformed its growth trajectory.
Record Q2 results and raised guidance
Dell reported fiscal second-quarter revenue of $46.97 billion, a 58% year-over-year increase, driven by robust demand for AI servers and related infrastructure. The company also disclosed $60.9 billion in AI-related orders during the quarter, alongside $16.4 billion in AI revenue and an AI backlog of $95 billion. This pipeline strength prompted Dell to raise its full-year guidance, now expecting sales growth of 69% and adjusted earnings per share growth of 148%, with adjusted EPS projected at $25.50.
The results triggered a wave of analyst upgrades and price-target increases from major firms, including Morgan Stanley, Goldman Sachs, and Citigroup. Dell's AI server business has expanded significantly, with cumulative AI server revenue approaching $74 billion—roughly three times the level of the previous year. Meanwhile, the company's commercial segment continued its momentum, posting 22% revenue growth and marking its eighth consecutive quarter of expansion.
Evercore raises price target to $650
Evercore ISI raised its price target for Dell to $650 from $575, maintaining the stock as a top pick. Analyst Amit Daryanani highlighted several catalysts, including the emergence of neocloud deployments, increasing enterprise AI adoption, and ongoing supply-chain constraints. He also pointed to potential margin expansion and Dell's capital allocation strategy as supportive factors.
Daryanani believes investors may be underestimating the impact of structural changes in the IT hardware market, which he describes as entering a period of de-commoditization. This shift could benefit Dell through both revenue and earnings growth. He sees potential upside to the current fiscal 2027 consensus earnings estimate of about $25.88 per share, with a bullish scenario pushing earnings above $30. Further AI server growth, higher adoption, storage-margin expansion, operating leverage, and additional capital returns could potentially drive fiscal 2028 EPS above $40. In a longer-term scenario, Daryanani suggests Dell shares could reach $1,000, based on a 25-times earnings multiple and $40 of EPS.
Index inclusion and market positioning
Dell's AI infrastructure expansion comes as the company transitions from a traditional PC maker into a major supplier of computing infrastructure. The stock has reached multiple 52-week highs as investors respond to its AI pipeline and backlog. Dell is scheduled to join the S&P 100 on September 21, a move that could increase demand from index-tracking funds and other investment vehicles, adding another layer of investor interest.
The upcoming conference appearance gives investors another opportunity to assess the development of Dell's AI infrastructure pipeline following its strong quarterly results. With a substantial AI backlog, rising orders, and growing server revenue, Dell remains increasingly exposed to the continued expansion of AI computing infrastructure, while analysts continue to debate how much of that growth is already reflected in its valuation.
As AI demand continues to reshape the technology landscape, Dell's positioning as a key infrastructure provider has drawn comparisons to other AI beneficiaries. For context, Broadcom's recent AI revenue target hike underscores the sector's momentum, while AI chip demand has also lifted broader markets. Dell's focus on AI servers and storage aligns with these trends, though its valuation remains a point of debate among investors.
With the stock trading near record levels, traders are closely watching for any signals from Michael Dell's presentation that could justify further upside. The company's ability to convert its massive backlog into sustained earnings growth will be key to maintaining investor confidence.
This article is for informational purposes only and does not constitute financial advice.
