Dell Technologies (DELL) – AI Server Momentum Could Power the Next Leg Higher
Dell Technologies (DELL) trades around $120, and there’s growing reason to believe the stock has more room to run—driven largely by its fast-growing AI server business and disciplined cost management.
Here’s what’s catching our eye: Dell is planning to ship approximately $9.4 billion worth of AI servers in the fourth quarter alone, which would bring the full-year total to $25 billion. That’s a major acceleration in a segment that is becoming increasingly important as enterprise demand for AI infrastructure surges.
According to Barclays, Dell’s AI server business is projected to grow by about 155% over the next two years. That’s a huge number, and what makes it more compelling is that the company is managing to mid-single-digit operating margins in this area while keeping gross margins in the high-single-digit range. Not flashy, but sustainable—and that matters.
Dell’s consistent operational discipline also sets it apart. The company is known for keeping expenses in check, and that efficiency is expected to help drive 20% EPS growth through 2027, even as it continues to invest in high-growth areas like AI infrastructure.
Barclays upgraded the stock to Overweight and reiterated its $148 price target, suggesting about 25% upside from current levels. They’re not alone—19 of the 26 analysts covering Dell have a Buy or Strong Buy rating, according to LSEG.
Dell has already climbed nearly 9% over the past year, but we see the potential for continued gains as the AI server business builds momentum and earnings improve. With execution on track and upside still on the table, Dell looks like a solid pick heading into the back half of the fiscal year.
