Dell Wins Wall Street Praise After $12 Billion AI Server Orders, Solid Commercial PC Demand

Wall Street analysts raised their price targets on Dell Technologies DELL on Friday after the company reported its first-quarter results on Thursday.

Dell reported first-quarter revenue of $23.38 billion, up 5%, beating the consensus estimate of $23.14 billion. The company reported adjusted earnings of $1.55 per share, missing analyst estimates of $1.69 per share.

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Dell expects second-quarter revenue of $28.5 billion-$29.5 billion. The company anticipates second-quarter adjusted earnings of $2.25. Dell expects fiscal 2026 revenue of $101 billion-$105 billion and full-year adjusted earnings of $9.40 per share.

Goldman Sachs analyst Michael Ng maintained a Buy rating on Dell Technologies and raised the price target from $95 to $130.
BofA Securities analyst Wamsi Mohan reiterated a Buy rating on Dell Technologies and raised the price target from $150 to $155.

Goldman Sachs: AI server momentum and buybacks offset EPS miss and fiscal 2026 EBIT outlook cut on traditional servers, storage, and PCs, as per Ng. Dell’s first-quarter EPS and EBIT missed on worse-than-expected ISG profits, and the company lowered its fiscal 2026 EBIT outlook to $9.1 billion-$9.5 billion (versus $9.2 billion-$9.6 billion prior) on slower market growth assumptions across traditional servers, PCs, and storage, he noted.

However, AI server KPIs were much better than expected, with Dell delivering a record $12.1 billion of AI server orders (versus Ng’s estimate of $7.2 billion), of which ~$7 billion should translate into revenue in the second quarter, the analyst said.

Ng noted that the 5-quarter AI server pipeline increased Q/Q, remains several multiples of the backlog, and includes many sovereign, AI cloud, and enterprise opportunities.

The analyst said ISG margins of 9.7% were missed (versus Ng estimate 10.8%) but were primarily related to traditional server customers and geographic mix (i.e., more large customers, less North America exposure) with no issues around AI server margins. Despite investor concerns on PC margins, CSG EBIT was in-line and the outlook was better-than-feared with Dell seeing deflationary commodity costs inclusive of tariffs, Ng noted.

Despite Dell’s fiscal 2026 EBIT guidance cut, it raised its EPS guidance by $0.10 to $9.15-$9.65 (versus $9.05-$9.55 prior) on better buybacks, the analyst said.

Ng’s fiscal 2026 revenue and EPS move to $108.3 billion and $9.30, from $102.8 billion and $9.13.

BofA Securities: Dell reported that first-quarter revenue beat expectations. Still, Mohan noted that EPS came in at the low end of the guide due to modest tariff impacts on CSG margins and slightly weaker growth from ISS.

The analyst said the second-quarter guide far exceeded Street expectations due to an incremental $5 billion in revenue from AI servers.

At the highest level, he noted the potential for Dell to deliver significantly higher AI server revenue over the next two years (>$30 billion) with a substantial upside to EPS (>$3).

Dell reported CSG segment revenue of $12.5 billion (+4.5% Y/Y), exceeding their guide of ~flat growth Y/Y, the analyst said.

Management noted they saw strong demand growth across SMB and enterprise customers, Mohan said.

Commercial far outperformed Consumer, as consumer revenue declined 19% due to competitive industry pricing, he said.

Mohan noted that Dell saw a “modest impact” on tariffs in the quarter but was able to absorb the impact and leave pricing unchanged for its customers. Management still expects that PC refresh will occur in fiscal 2026 and should drive low single-digit to mid-single-digit revenue growth in CSG.

He said the confidence in PC refresh is due to the abnormal age of the install base and recent indicators for Win 11 upgrades and upgrades to AI PCs.

Mohan noted that Dell’s AI server backlog stands at $14.4 billion, implying $12.1 billion in AI server orders and $1.8 billion in AI server revenue and shipments in the first quarter.

The analyst said that for the second quarter, Dell guided AI server shipments to $7 billion, well above expectations, and increased its fiscal guide to $15 billion-plus (versus just $15 billion prior).

He said management is confident in its ability to grow AI server revenue and drive incremental growth in operating profit dollars and cash flows.

For the second quarter, Mohan modeled AI server revenue ~in line with the shipment guide of $7 billion (+126% Y/Y, +289% Q/Q), Mohan noted.

Mohan’s fiscal 2026 revenue and EPS move to $105.0 billion and $9.40, from $103.2 billion and $9.16.

Price Actions: DELL stock is trading lower by 1.8% to $111.57 at last check Friday.

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