Dell stock price target raised to $152 from $150 at Raymond James

Dell Technologies reported stronger-than-expected fiscal Q2 2026 results, with revenue reaching a record $29.8 billion and EPS exceeding forecasts. However, the company's stock saw an initial after-hours decline due to a mixed Q3 outlook, projecting higher sales but lower earnings per share. A key highlight is Dell's increased AI revenue target to $20 billion, signaling significant AI-driven sales growth, despite current margin dilution from AI investments and storage weakness. Multiple analyst firms, including Raymond James, Evercore ISI, Barclays, BofA Securities, and UBS, have since reiterated positive ratings and raised price targets, emphasizing Dell's robust AI server momentum and long-term earnings growth potential.

Analysis

Dell Technologies reported a strong fiscal second quarter for 2026, with record revenue of $29.8 billion and EPS of $2.32, surpassing analyst consensus estimates. Despite this performance, the company's stock experienced an approximate 5% after-hours decline, a reaction attributed to its mixed fiscal third-quarter guidance which projects higher-than-expected sales but lower earnings per share. This margin pressure is reportedly driven by the dilutive effect of its rapidly growing artificial intelligence business and concurrent weakness in its Storage segment. Highlighting the strategic pivot, Dell increased its AI revenue target to $20 billion from a prior target of over $15 billion, signaling AI servers as a primary engine for top-line growth. In contrast to the initial market reaction, a consensus of analyst firms including Raymond James, Evercore ISI, BofA Securities, and UBS reiterated positive ratings and raised price targets, focusing on the powerful momentum in AI server revenue as a driver for long-term earnings expansion. The company's guidance also sets an ambitious target for the fiscal fourth quarter, implying approximately 20% earnings growth from the third quarter.

Key Decisions for Investors

• Investors should weigh the near-term margin dilution, caused by the AI ramp-up and storage weakness, against the significant long-term growth potential signaled by the raised $20 billion AI revenue target.
• Monitor Dell's execution on profitability in the coming quarters, as the current guidance sets a high bar with an implied 20% earnings growth from Q3 to Q4, which will be critical for validating the company's strategy.
• Consider that the initial negative stock reaction to the mixed Q3 outlook contrasts sharply with a strong bullish consensus from multiple analyst firms, suggesting the market may be underappreciating the long-term AI growth narrative.