Mizuho cuts Dell stock price target to $140, maintains Outperform

On Friday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Dell Technologies (NYSE:DELL), reducing the price target from $150.00 to $140.00, while continuing to recommend the stock with an Outperform rating. Dell’s latest financial results showed January quarter revenue at $23.9 billion, falling short of the anticipated $24.6 billion. The stock, currently trading at $107.83, has experienced an 8.3% decline over the past week, though InvestingPro analysis suggests the company remains undervalued relative to its Fair Value. The company’s guidance for the April quarter suggests a decline of about 4% quarter-over-quarter to $23.0 billion, which is slightly less than the consensus estimate of around $23.6 billion. Nonetheless, the forecast for Fiscal Year 2026 estimates an 8% year-over-year increase to approximately $103 billion, aligning with consensus projections.

The firm highlighted several key points from Dell’s report, including a significant decrease in AI Server orders, which dropped to $1.7 billion, a 53% decline from the previous quarter. The backlog for AI Servers also saw a reduction of roughly 9% quarter-over-quarter, amounting to $4.5 billion. With a market capitalization of $75.23 billion and a P/E ratio of 18.92, Dell remains a prominent player in the Technology Hardware sector. InvestingPro data reveals 12 additional key insights about Dell’s positioning in the AI hardware market. Despite these downturns, AI Server revenues were approximately $2.1 billion, representing a 28% quarter-over-quarter decrease. Mizuho anticipates a significant rebound in the AI Server segment, projecting revenues to hit $15 billion in Fiscal Year 2026, a 53% increase year-over-year, with estimates for the April quarter rising by about 48% quarter-over-quarter.

The Infrastructure Solutions Group (ISG) Operating Margins (OMs) improved by 480 basis points quarter-over-quarter, with a favorable mix attributed to PowerStore and conventional servers. The report also mentioned that the second half of 2025 is expected to see a PC refresh cycle, as customers prepare for the end of life (EOL) of Windows 10, which currently has over 700 million users, and the introduction of AI PCs.

Mizuho’s reiteration of the Outperform rating and the adjustment of its estimates and price target to $140 are based on Dell’s strong positioning in the AI server market, the anticipated PC and AI PC refresh cycle tailwinds heading into 2025, and the company’s additional $10 billion buyback plan. This aligns with InvestingPro’s assessment, which highlights Dell’s aggressive share buyback program and strong return metrics over the past decade. For detailed analysis of Dell’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Dell Technologies reported its fourth-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $2.68, compared to the forecasted $2.51. However, the company missed revenue expectations, reporting $23.9 billion against a forecast of $24.55 billion. Despite the earnings beat, Dell’s stock experienced a decline, reflecting investor concerns over the revenue shortfall. The company introduced several AI-optimized platforms and new products, which could enhance its competitive position. Looking ahead, Dell anticipates fiscal year 2026 revenue between $101 billion and $105 billion, with EPS guidance of $9.30. The company expects significant growth in its Infrastructure Solutions Group, driven by AI server shipments projected at $15 billion. Dell’s strategic initiatives in AI and innovative product offerings have bolstered its market position, although potential challenges remain in sustaining growth amid competitive pressures.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.