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Dell’s AI server party is apparently still going
BofA Global Research came in Monday with the kind of note bulls love: a Buy reiteration on Dell Technologies and a price target hike to $280 from $246. Translation? The bank thinks Dell’s AI server business still has plenty of runway, and the market may be underestimating just how sticky that demand is.
The big bet: Q1 beat, then maybe some extra sauce
Dell reports fiscal first-quarter earnings on May 28, and analyst Wamsi Mohan expects a clean beat on both revenue and EPS. He also thinks second-quarter guidance could come in above Street expectations, which is Wall Street’s favorite way of saying, “This story might not be done running yet.”
A few of the numbers behind the optimism:
- BofA sees first-quarter AI server revenue at about $15 billion
- Orders could hit $20 billion
- Backlog exiting the quarter may land around $49 billion
- Full-year fiscal 2027 AI server revenue is still pegged at $60 billion
That’s a lot of silicon, and a lot of reasons traders keep treating Dell like more than a sleepy PC name.
PCs are fine, but AI is doing the heavy lifting
The note also sketches out a split-screen hardware story. Enterprise demand for standard servers may cool a bit if prices climb, while Tier 2 cloud providers keep ordering CPU-heavy gear for agentic AI and inferencing. Meanwhile, PC demand has held up better than expected so far, with BofA lifting its first-half Client Solutions Group growth estimate to 20%.
The flip side? Mohan still expects a 12% deceleration in the second half, so this is not a straight-line rocket ship. It’s more like a strong tailwind with a few potholes.
Why investors should care
Dell stock was already wobbling Monday, down 1.94% to $237.29 at the time of publication. If Dell can back up the AI-server hype with a solid May 28 print and upbeat guidance, bulls get another leg to stand on. If not, the market may remind everyone that expensive multiples and hype cycles can be a very annoying combo.
Big picture: Dell is increasingly being valued like an AI infrastructure story, not just a PC-and-boxes story. That’s great—until the next earnings call turns into the audition.