Dell Technologies (DELL) is set to report its fiscal first-quarter earnings on May 28, and BofA Global Research thinks the numbers could be impressive. Analyst Wamsi Mohan reiterated a Buy rating on the stock Monday and raised his price target to $280 from $246, pointing to relentless demand for AI servers and a likely beat on both revenue and earnings per share.
Mohan expects Dell's Q2 guidance to come in above Wall Street's current consensus. He's forecasting second-quarter revenue between $37 billion and $40 billion, with EPS landing between $2.85 and $3. That's a pretty wide range, but the high end would be a solid jump.
The big story here is AI servers. Mohan noted "steadfast demand from AI servers" in the first half of the year and expects that momentum to carry through the second half. BofA estimates Dell's AI server revenue hit $15 billion in the first quarter, with orders reaching $20 billion. The backlog exiting the quarter? A whopping $49 billion. Mohan is sticking with his fiscal year 2027 AI server revenue forecast of $60 billion.
But not all hardware is created equal. The analyst sees divergent trends in the second half. Enterprise demand for Industry Standard Servers (ISS) could slow due to price increases. On the flip side, Tier 2 Cloud Service Providers are ramping up orders for CPU-intensive hardware needed for agentic AI and inferencing. So it's a mixed bag, but the AI tailwind is strong enough to offset the ISS headwind.
PC demand has also been better than expected in the first half. Mohan raised his first-half Client Solutions Group revenue growth estimate to 20%, though he still forecasts a 12% deceleration in the second half. That's a bit of a comedown, but it's not alarming.
The $280 price target is based on a 17 times multiple on Mohan's calendar year 2027 EPS estimate of $16.03. He's bullish because he believes enterprise AI adoption is still in the early innings, Dell is executing well, and the company is attaching more high-margin storage intellectual property to its server sales.
Dell shares were down about 1.94% at $237.29 on Monday, according to market data. That's a small dip, but if Mohan is right, the stock could have plenty of room to run.
