Dell Technologies Inc. (DELL) is on a roll, and JPMorgan thinks the best is yet to come. The bank's analyst, Joseph Cardoso, has upped his price target on the stock to $635 from $565, keeping an Overweight rating. That new target suggests a whopping 49% upside from where shares closed on September 1st at $425. The reason? AI demand is exploding, and Dell is cashing in.
Cardoso highlighted record AI server orders of $60.9 billion in the fiscal second quarter, with the company ending the period with a backlog of $95 billion. AI server revenue more than doubled year-over-year to $16.4 billion. Dell now expects AI server revenue to hit $74 billion for fiscal 2027, a big jump from its previous forecast of $60 billion.
JPMorgan praised Dell's execution as "best in class," pointing to those record orders, the massive backlog, disciplined pricing, and record margins in its Infrastructure Solutions Group. The bank also noted that Dell's five-quarter pipeline is still growing and remains several times larger than its backlog. Some customers are even signing multiyear contracts to lock in supply, which could keep the growth engine humming into fiscal 2028.
But it's not just about AI. Dell's traditional server business is also booming, with revenue more than doubling as companies modernize their data centers and replace aging equipment. Cardoso pointed out that about 1.2 million installed assets still run on Dell's 14th-generation technology or older, and he expects security needs, data-center resilience, and AI inference workloads to drive further upgrades. Storage revenue also grew by double digits, with strong demand across Dell's PowerStore, PowerScale, and ObjectScale lines.
The numbers speak for themselves. Dell reported second-quarter revenue of $46.97 billion, up 58% year-over-year, beating JPMorgan's $45 billion estimate and the consensus of about $44.8 billion. Adjusted earnings came in at $7.04 per share, easily topping JPMorgan's $5.06 estimate and the Street's forecast of about $4.90. For the full fiscal 2027, Dell now expects revenue of about $192 billion, well above its previous outlook of $165 billion to $169 billion, and adjusted earnings of roughly $25.50 per share.
JPMorgan believes Dell's operating leverage, disciplined pricing, and improving storage profitability will continue to drive growth, and the firm has raised its revenue and earnings estimates accordingly.
The broader analyst community is also bullish. Dell carries a consensus Buy rating with an average price target of $526.63. Raymond James maintained an Outperform rating and raised its target to $617. UBS kept a Neutral rating but lifted its forecast to $500. Bernstein maintained an Outperform and raised its target to $650.
For investors looking to get exposure without picking individual stocks, Dell is held by the Tortoise AI Infrastructure ETF (TCAI), the GraniteShares 2x Long DELL Daily ETF (DLLL), and the American Customer Satisfaction ETF (ACSI).
Shares of Dell were up 4.4% at $443.71 at the time of publication on Wednesday, reflecting the market's positive reaction to the earnings beat and analyst upgrades.
