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Investing.com - TD Cowen has raised its price target on Dell (NYSE:DELL) to $130.00 from $125.00 while maintaining a Hold rating, citing robust artificial intelligence (AI) server demand. The stock, currently trading at $134.05 with a market cap of $91 billion, has shown impressive momentum with a 32% return over the past six months. InvestingPro analysis reveals 12 key insights about Dell’s performance and outlook, including strong returns across multiple timeframes.
Dell reported $8.2 billion in AI server revenue for the July quarter, with new orders of $5.6 billion, resulting in an AI backlog of $11.7 billion. This strong performance led the company to boost its fiscal 2026 Infrastructure Solutions Group (ISG) outlook to mid/high-20% growth and total revenue growth to 12% year-over-year. The company’s current revenue stands at $101.5 billion, with a healthy 10.5% growth rate over the last twelve months. According to InvestingPro’s Fair Value analysis, Dell’s stock appears slightly overvalued at current levels.
The company has raised its fiscal 2026 revenue outlook to $105-109 billion, up from its previous guidance of $101-105 billion, and adjusted its earnings per share target to $9.55 plus or minus $0.15, with the previous midpoint at $9.40.
TD Cowen noted that while July quarter AI orders moderated to $5.6 billion from $12.1 billion in the April quarter, the solid backlog supports Dell’s projection of approximately $20 billion in AI server revenue for fiscal 2026.
The analyst also highlighted that gross margins fell to 18.7%, down 290 basis points quarter-over-quarter, due to lower AI margins and one-time supply chain costs, while adding that the Windows 11 refresh cycle is only about 50% complete, suggesting replacement demand could continue into early fiscal 2027.
In other recent news, Dell reported quarterly revenue of $29.8 billion and earnings per share of $2.32, both surpassing analyst expectations. This performance was bolstered by a 19% year-over-year sales increase, with notable growth in the Infrastructure Solutions Group and Client Solutions Group. Dell’s strong results have led several firms to adjust their price targets. Raymond James raised its target to $152, maintaining an Outperform rating, while Evercore ISI kept its target at $160 with the same rating. Barclays increased its target to $131, highlighting the significant contribution of AI server revenues. BofA Securities also raised its target to $167, citing expectations for long-term earnings growth driven by AI servers. Additionally, UBS lifted its target to $155, acknowledging the strong AI momentum that helped exceed their revenue and earnings forecasts. These developments reflect Dell’s robust performance and the market’s positive outlook on its AI-driven growth.
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