Dell Stock Is Surging. Another Legacy Tech Name Is Becoming an AI Winner.

Dell Technologies (DELL) was viewed as a mature PC and enterprise hardware company fighting for relevance in a rapidly changing tech landscape. Now, the artificial intelligence (AI) boom is rewriting that story. On Thursday, Dell stock surged around 39% after the company delivered blockbuster earnings, fueled by explosive demand for AI-optimized servers and data center infrastructure.

With AI server orders skyrocketing, revenue guidance soaring, and partnerships tied closely to the massive global AI buildout, Wall Street is increasingly viewing Dell not as a legacy tech name, but as one of the biggest emerging winners of the AI infrastructure race.

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About Dell Technologies Stock

Dell Technologies is a multinational technology company with its headquarters in Round Rock, Texas. Primarily operating through two segments – Client Solutions Group (PCs, workstations, peripherals) and Infrastructure Solutions Group (servers, storage, networking, services) – Dell provides comprehensive hardware, software and services solutions to consumers, businesses, public sector and enterprise customers globally. The company’s market cap is $204.7 billion.

DELL has emerged as one of the market’s strongest AI infrastructure trades in 2026, with the stock delivering explosive gains as investors increasingly bet on the company’s booming AI server business. Shares have surged 234.37% year-to-date (YTD) and 269.97% over the past 52 weeks, dramatically outperforming the broader market as demand for AI-optimized servers and data center infrastructure accelerated.

Momentum intensified in late May after Dell reported blockbuster quarterly earnings and sharply raised its full-year outlook. The stock had already climbed to a fresh 52-week high of $327.73 on May 28 ahead of the earnings release, fueled by bullish Wall Street price target increases and growing optimism surrounding Dell’s AI backlog and server demand pipeline. By Friday’s market close, the fresh high was a whopping $429.15.

Following the earnings announcement, Dell shares exploded in after-hours trading, surging around 39% in massive post-market gains after the company posted an enormous earnings beat, raised revenue forecasts, and revealed AI server orders had surged more than 750%. The rally marked one of Dell’s biggest post-earnings moves in years and reinforced Wall Street’s growing view that the company is evolving from a legacy PC maker into a leading AI infrastructure powerhouse.

The stock is currently trading at 25 times forward price-to-earnings, a modest discount to industry peers.

Solid Q1 Results

Dell Technologies released its first quarter fiscal 2027 financial results on May 28, delivering one of the strongest quarters in the company’s history as AI infrastructure demand accelerated sharply across its server and data center business. The company reported record quarterly revenue of $43.84 billion, representing an 88% year-over-year (YOY) increase, while non-GAAP EPS climbed 214% to a record $4.86, beating expectations. Operating cash flow also hit a quarterly record of $4.1 billion.

Dell’s Infrastructure Solutions Group (ISG), which includes servers, networking, and storage, was the primary growth engine during the quarter. ISG revenue surged 181% YOY to a record $29.0 billion. Within the segment, AI-optimized server revenue exploded 757% YOY to $16.1 billion, highlighting the extraordinary demand for AI infrastructure. Traditional servers and networking revenue also remained exceptionally strong, rising 92% YOY to $8.5 billion, while storage revenue increased 8% to $4.3 billion. ISG operating income jumped 206% YOY to a record $3.1 billion.

Dell’s Client Solutions Group (CSG), which houses its PC business, also posted solid growth despite the company’s increasing AI exposure dominating investor attention. CSG revenue rose 17% YOY to $14.6 billion. Commercial client revenue increased 18% to a record $13 billion, benefiting from enterprise refresh cycles and AI-capable PC demand, while consumer revenue grew 9% to $1.6 billion. Segment operating income surged 79% YOY to a record $1.2 billion.

AI demand remained the defining theme of the quarter. Dell disclosed that it booked $24.4 billion in AI orders during the quarter and exited Q1 with a record AI backlog of $51.3 billion. It is benefiting as AI demand continues to outpace supply, as hyperscalers, enterprises, sovereign customers, and cloud providers rapidly expand AI data center deployments.

Moreover, for the second quarter of fiscal 2027, Dell expects revenue between $44 billion and $45 billion and adjusted EPS of $4.80. For the full fiscal year 2027, the company raised revenue guidance to between $165 billion and $169 billion, up dramatically from its prior outlook of $138 billion to $142 billion, while adjusted EPS guidance came in at $17.90.

Management increased its fiscal 2027 AI server revenue forecast to $60 billion, up from its earlier expectation of $50 billion, reinforcing Wall Street’s growing belief that Dell is rapidly transforming from a traditional PC manufacturer into one of the largest beneficiaries of the global AI infrastructure boom.

Analysts forecast EPS of $12.21 for fiscal 2027, a 32% YOY jump, followed by a further 12.2% rise to $13.70 in 2028.

What Do Analysts Expect for Dell Technologies Stock?

Recently, Susquehanna upgraded Dell Technologies to “Positive” from “Neutral” and sharply raised its price target to $700 from $138, citing accelerating growth in the company’s AI server business and improving margins.

Also, Barclays raised its price target on Dell Technologies to $550 from $168 while maintaining an “Overweight” rating after the company delivered strong quarterly results across all major business segments.

Overall, DELL has a consensus “Moderate Buy” rating. Of the 25 analysts covering the stock, 15 advise a “Strong Buy,” two suggest a “Moderate Buy,” seven analysts give it a “Hold” rating, and one recommends a “Strong Sell.”

DELL has already surged past the average analyst price target of $212.64, while Susquehanna’s Street-high target price of $700 suggests that the stock could still rally 66.31%.

On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com