Dell Stock Soars As AI Data Center Business Fuels Growth

Dell Technologies (DELL) stock rocketed on Friday as investors reacted positively to the computer maker’s monster beat-and-raise earnings report.

Dell’s fiscal fourth-quarter results and guidance were fueled by strong sales of servers and other gear for data centers running artificial intelligence applications.

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Late Thursday, Dell reported adjusted earnings of $3.89 a share on sales of $33.38 billion in the quarter ended Jan. 30. On a year-over-year basis, Dell earnings soared 45% while sales increased 39%.

For the current quarter, its fiscal Q1, Dell forecast adjusted earnings of $2.90 a share on sales of $35.2 billion. That would translate to year-over-year growth of 87% in earnings and 51% in sales.

For the full year ahead, Dell guided to adjusted earnings of $12.90 a share on revenue of $140 billion. That would translate to year-over-year growth of 25% in earnings and 23% in sales for fiscal 2027.

Dell’s full-year growth forecast is underpinned by AI server revenue seen doubling to $50 billion, along with modest growth in traditional servers and storage, Evercore ISI analyst Amit Daryanani said in a report. He rates Dell as outperform with a price target of 160.

Dell Stock Scores Price-Target Hikes

On the stock market today, Dell stock surged 21.9% to close at 148.08.

At least six Wall Street analysts raised their price targets on Dell stock after the Round Rock, Texas-based company’s quarterly report.

Despite industry concerns about shortages of memory and other parts, Dell has access to all of the components it needs to achieve its fiscal 2027 goals, Daryanani said. If it can get incremental access to more AI processors, it could drive further upside to its AI server forecast, he said.

Dell’s AI customer base has surpassed 4,000 with growth across neoclouds, sovereigns and enterprise customers, Chief Operating Officer Jeff Clarke said on a conference call with analysts. That’s evidence that demand for the technology is broadening beyond the hyperscale cloud service providers, he said.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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