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Investing.com - Barclays raised its price target on Dell (NYSE:DELL) to $131.00 from $123.00 on Friday, while maintaining an Equalweight rating on the stock. The new target aligns with current market sentiment, as Dell trades near $134, having achieved an impressive 32% return over the past six months. According to InvestingPro analysis, the stock is currently trading slightly above its Fair Value.
The price target increase follows Dell’s second-quarter revenue of $29.8 billion, which exceeded Barclays’ above-consensus estimate, driven by strong AI server revenues of $8.2 billion shipped and $5.6 billion in orders booked. This performance contributes to Dell’s solid 10.5% year-over-year revenue growth, though InvestingPro data shows gross profit margins remain under pressure at 21.3%.
Dell has revised its AI server shipment target upward from at least $15 billion to $20 billion, suggesting a balanced second half with approximately $10 billion in revenues weighted slightly more toward the third quarter than the fourth quarter.
The company’s ending backlog reached nearly $12 billion, with its customer pipeline expanding to include more enterprise and sovereign customers, though gross margins fell to 18.7% in the quarter.
Traditional server revenues grew approximately 4% in the quarter with North America demand remaining challenged, while storage was down low single digits year-over-year, and the Consumer segment declined high single digits compared to the previous year.
In other recent news, Dell Technologies reported strong earnings for the second quarter of fiscal year 2026, with earnings per share (EPS) of $2.32, surpassing the forecasted $2.29. The company achieved a record revenue of $29.8 billion, exceeding the expected $29.2 billion. This robust financial performance was driven in part by significant growth in artificial intelligence (AI) server revenue. UBS highlighted that Dell’s AI server revenue reached $8.2 billion, surpassing its projection of $7 billion. In light of these results, UBS raised its price target for Dell to $155 from $145, maintaining a Buy rating. Similarly, BofA Securities increased its price target to $167, citing expectations for long-term earnings per share growth of 15% over the next five years, supported by AI server growth. These developments reflect strong momentum for Dell in the AI sector, as recognized by multiple analyst firms.
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