Mizuho raises Dell stock price target to $160 on AI server growth

Mizuho has raised its price target on Dell to $160 from $150, maintaining an Outperform rating, citing significantly stronger expectations for Dell's AI server business. The firm increased its fiscal 2026 and 2027 AI server revenue forecasts to $16.6 billion and $22.0 billion, respectively, driven by anticipated growth in AI server deployments. This positive re-rating underscores Dell's strategic positioning in AI infrastructure, even as the company recently experienced a stock decline following Super Micro's results, indicating ongoing competitive pressures in the high-performance server market.

Analysis

Analyst sentiment for Dell Technologies (DELL) has strengthened significantly, with Mizuho raising its price target to $160 from $150 and maintaining an Outperform rating. This revision is predicated on an increasingly bullish outlook for Dell's artificial intelligence server business, reflected in the firm's raised fiscal 2026 and 2027 estimates, which now project revenues of $106 billion and $116 billion, respectively. Specifically, Mizuho has boosted its AI server revenue forecasts for fiscal 2026 and 2027 to $16.6 billion and $22.0 billion, attributing the growth to major deployments like xAI’s Colossus 2. The new price target implies an expanded valuation multiple of 14.4x Mizuho's fiscal 2027 EPS estimate of $11.10. This positive view is corroborated by BofA Securities, which also raised its target to $165. However, the stock faces near-term headwinds, having recently declined in response to disappointing results from competitor Super Micro Computer, which raised concerns about market share dynamics in the high-performance server space. While analysts are upgrading forecasts, InvestingPro's proprietary model suggests the stock is currently fairly valued, presenting a more neutral quantitative perspective.

Key Decisions for Investors

• Investors should weigh the strong bullish sentiment from analysts like Mizuho and BofA, who see significant upside driven by AI server growth, against quantitative models suggesting the stock is fairly valued at current levels.
• Monitor competitive developments closely, particularly results from peers like Super Micro Computer, as sector-wide sentiment and concerns over market share can introduce significant volatility independent of Dell's own performance.
• Upcoming earnings reports will be critical to validate the aggressive AI server revenue forecasts of $16.6 billion for FY26 and $22.0 billion for FY27, which are now central to the stock's investment thesis.
• Consider the recent stock pullback, triggered by competitor weakness, as a potential entry point if one subscribes to the long-term AI growth narrative detailed by Mizuho.