Dell Poised To Ride AI Server Boom Toward Higher Sales, Long-Term Profit Growth: Analyst

BofA Securities analyst Wamsi Mohan maintained a Buy rating and $165 price target on Dell Technologies (DELL), projecting continued robust AI server momentum ahead of the company's fiscal second-quarter 2026 earnings. Mohan anticipates Q2 FY26 revenue of $29.4 billion and EPS of $2.35, with AI server sales reaching $7.3 billion and a $12.1 billion backlog. For the full fiscal year 2026, he forecasts AI server sales of $20.7 billion, exceeding Dell's current guidance, and sees long-term EPS potential above $19 by 2030, driven by AI servers and margin improvements, despite the stock trading slightly lower on Friday.

Analysis

A BofA Securities analyst has maintained a Buy rating on Dell Technologies (DELL) with a $165 price target, citing strong conviction in the company's AI server momentum. The analysis projects Dell's fiscal second-quarter 2026 results will reach the high end of guidance, with revenue of $29.4 billion and EPS of $2.35. Critically, AI server revenue for the quarter is forecast at $7.3 billion with orders of $5 billion, which would expand the backlog to $12.1 billion. For the full fiscal year 2026, the analyst's model anticipates AI server sales hitting $20.7 billion, a figure substantially above Dell's current guidance of over $15 billion, suggesting a significant guidance raise is likely. This AI-driven growth is expected to power the Infrastructure Solutions Group (ISG) to 36% year-over-year revenue growth with improving margins. The Client Solutions Group (CSG) is also seen contributing positively, with a 5% year-over-year revenue increase to $13 billion, partly fueled by a pull-in of commercial PC sales ahead of potential tariffs. The long-term outlook is equally robust, with a forecast for EPS to exceed $19 by 2030, representing a 15% CAGR driven by the sustained AI server cycle, favorable product mix, and the adoption of AI PCs. Despite this highly optimistic forecast, Dell's stock traded down 0.32% to $138.40 on the day of the report.

Key Decisions for Investors

• Investors should consider that the analyst's FY26 AI server revenue forecast of $20.7 billion significantly exceeds Dell's current guidance, suggesting a potential upside catalyst if the company raises its outlook in the upcoming earnings report.
• Monitor Dell's Q2 earnings on August 28 for confirmation of this thesis, paying close attention to the AI server backlog, which is projected to reach $12.1 billion, and any updates to full-year guidance.
• While the AI narrative is compelling, note that the forecasted strength in the Client Solutions Group is partially attributed to a temporary 'pre-tariff demand pull-in', which could create tougher year-over-year comparisons in subsequent quarters.
• For long-term holders, the projected path to over $19 in EPS by 2030 hinges on sustained margin expansion in the ISG segment and the successful market adoption of AI PCs, making these key trends to track beyond the immediate quarter.