Gotrade News - Dell Technologies (DELL) stock surged about 9.2% to a fresh 52-week high of $461 on blockbuster AI server results. The rally lifted shares more than 156% since March 31 lows.
Investors cheered record AI server orders and a backlog that signals years of revenue visibility. The print reset Wall Street's view on enterprise AI infrastructure spending.
Key Takeaways
- Q1 FY27 revenue hit $43.8B, up 88% year-over-year, with AI server revenue up 757% to $16.1B.
- AI server backlog reached a record $51.3B after $24.4B in new orders during the quarter.
- Goldman Sachs and Bernstein SocGen both raised price targets to $500, with one analyst modeling 30% further upside.
According to Investing.com, Dell's May 28 release showed GAAP EPS of $5.24, up 282% year-over-year. Non-GAAP EPS reached $4.86, a 214% jump from the prior-year quarter.
The AI server segment carried the print, with $16.1B in revenue marking a 757% annual surge. Demand from hyperscalers and sovereign AI customers drove the upside.
Dell's AI Server Backlog Hits Record
New AI orders totaled $24.4B in the quarter, lifting the backlog to a record $51.3B. Management said order momentum continued building into the second quarter.
Dell guided FY27 AI server revenue to roughly $60B, a sharp step up from prior expectations. The company paired that with non-GAAP EPS guidance of $17.90 at the midpoint, up 74%.
The guide implies durable margin leverage as AI server mix scales. Operating discipline on traditional ISG and CSG units helped offset AI's lower gross margin profile.
Peers including Hewlett Packard Enterprise (HPE) and NVIDIA (NVDA) traded higher in sympathy as the read-through extended across the AI infrastructure stack. The print eased fears that enterprise AI capex was peaking.
Goldman Sachs raised its price target to $500 from $230 and reiterated a Buy rating. Bernstein SocGen lifted its target to $500 from $280, maintaining Outperform.
Analysts See 30% Upside
According to Barchart, analyst Mark R. Hake projects a $544.57 price target, implying about 29.4% upside from the May 29 close of $420.91. The model anchors on free cash flow yield discipline.
Hake applies a 3.45% FCF yield to trailing twelve-month free cash flow of $9.44B. That framework lifts the implied market cap meaningfully above the current $273.41B.
His FY28 model projects revenue of $184.32B, up 37.3% from the prior-year run rate. He pencils in $13B of FCF at a 7.05% margin, well above current levels.
The math leans on AI server scale-up plus operating-cost leverage from a leaner cost base. Buybacks and dividends provide an additional shareholder return floor.
The setup positions Dell alongside server peers like Super Micro Computer (SMCI). Multiple expansion could compound as AI revenue visibility hardens through FY27.
