Dell shares jump 3% as BofA lifts target on AI server boom
Analyst raises price target to $172, citing surging demand and $60B full-year revenue outlook
Dell Technologies shares surged more than 3% on Monday after Bank of America lifted its price target on the stock, citing stronger-than-expected demand for artificial intelligence servers and a promising cybersecurity initiative.
The stock climbed to $162.90 by late afternoon trading, adding roughly $5.23 and extending the company's gains to more than 150% over the past year. Bank of America analyst Wamsi Mohan raised his price target to $172 from $155 while maintaining a Buy rating, according to a research note published Monday.
The upgrade follows an Asia supply-chain review that revealed accelerating demand for AI infrastructure. Mohan increased his first-quarter AI server revenue estimate to $15 billion from a prior $13 billion, while lifting his full-year projection to $60 billion from $50 billion. The analyst noted that Dell's own fiscal 2027 guidance of $50 billion in AI server sales "could end up conservative" given the current trajectory.
Dell's AI server business has emerged as a core growth driver, with the company shipping approximately $25 billion worth of AI-optimized servers in fiscal 2026—a more than 150% increase from the previous year. The Round Rock, Texas-based company ended fiscal 2026 with $64.1 billion in AI server orders and entered fiscal 2027 with a record backlog of $43 billion, according to industry analysis from Futurum Group.
A strategic partnership with NVIDIA has bolstered Dell's competitive position. The "Dell AI Factory with NVIDIA" initiative has attracted more than 4,000 customers, helping NVIDIA expand beyond hyperscale data centers into broader enterprise markets. The NextPlatform, which tracks the server industry, notes that AI servers have finally come to dominate Dell's systems business, marking a significant pivot from its traditional PC and storage focus.
"Demand for AI servers remains strong," Mohan wrote in the note, highlighting that supply-chain checks indicate continued robust ordering patterns across enterprise and cloud customers.
Separately on Monday, Dell announced new cybersecurity and quantum-resilience enhancements aimed at protecting AI infrastructure. The company unveiled quantum-ready security features for commercial PCs, including hardened embedded controllers designed to resist future quantum-enabled attacks and enhanced BIOS verification aligned with post-quantum standards. Dell also expanded its PowerProtect cyber resilience portfolio with AI-powered recovery tools and extended its Managed Detection and Response service to PowerScale storage systems.
The dual announcements underscore Dell's strategy to capitalize on the AI boom while addressing growing security concerns in enterprise data centers. As companies accelerate AI deployments, demand for both high-performance computing infrastructure and robust cybersecurity measures has intensified.
Dell's momentum comes at a time when competitor Supermicro has faced regulatory challenges, potentially creating market share opportunities for established players like Dell. The company's strong balance sheet and existing relationships with large enterprises position it to capture a significant portion of the expanding AI server market.
With 19 analysts rating the stock a Buy or Strong Buy and just one Sell rating, according to market data, sentiment remains overwhelmingly positive. The consensus analyst target price stands at $167.22, just below Bank of America's new $172 target, suggesting further upside potential if AI demand continues to outpace expectations.
The stock's 52-week range spans from $65.04 to $169.90, reflecting its remarkable turnaround over the past year. Dell now trades at a forward price-to-earnings ratio of 12.09, compared to a trailing multiple of 18.14, indicating that investors expect earnings growth to continue accelerating.