Bank of America revamps Dell stock target after earnings

Shares of Dell Technologies (DELL) soared 22% connected Feb. 27 aft the institution reported beardown fiscal Q4 net and Q1 guidance.

In 1984, Michael Dell started the institution portion helium was a pupil astatine the University of Texas. Originally focused connected selling PCs, the institution present sees AI arsenic its biggest opportunity.

Dell sells AI-optimized servers and integrated infrastructure that assistance companies tally ample connection models successful their ain information centers.

Nvidia (NVDA) is simply a cardinal spouse of Dell, with Dell's systems built utilizing Nvidia GPUs.

“Nobody is amended astatine gathering end-to-end systems of precise ample standard for the endeavor than Dell,” Nvidia CEO Jensen Huangsaid successful 2024.

Dell banal surged much than 50% successful 2024 connected the market’s precocious expectations for its concern astir AI. But the banal is up conscionable 9.23% successful 2025, portion the S&P 500 rallied 16.39% past year.

For the 4th ended Jan. 30, Dell reported adjusted net of $3.89 per share, beating Wall Street’s estimation of $3.52, information from Investing.com shows. Revenue came successful astatine $33.38 billion, topping the $31.41 cardinal forecast.

Dell posted grounds full-year gross of $113.5 billion, a 19% summation from the anterior year, portion diluted net per stock climbed to a grounds $8.68, up 36% twelvemonth implicit year.

Related: Cathie Wood buys $7 cardinal of fashionable AI stock

The institution expects fiscal 2027 gross successful the scope of $138 cardinal to $142 billion, good supra the $124.7 cardinal consensus. The midpoint of $140 cardinal implies astir 23% year-over-year growth. It besides expects diluted EPS to beryllium $11.52 astatine the midpoint, up 33% from past year.

Dell's main operating officer, Jeff Clarke, said the past twelvemonth was "a defining year" marked by grounds full-year revenue, EPS, and currency generation. “The AI accidental is transforming our company," Clarke said.

Notably, Dell expects gross from its artificial quality servers to scope $50 cardinal successful fiscal 2027, much than treble the erstwhile year.

"Our lawsuit basal [for AI products] surpassed 4,000, with maturation crossed neo clouds, sovereigns, and endeavor customers—evidence that request is broadening crossed each lawsuit types," Clarke aboriginal said successful an net call.

Dell's AI server gross accounts for astir 21.7% of its full income successful the past year.

Dell operates done 2 halfway segments: the Infrastructure Solutions Group, which sells AI-optimized servers, retention and networking for information centers, and the Client Solutions Group, which includes its PC business.

ISG is Dell’s main maturation driver, generating astir $60.8 cardinal of the company’s $113.5 cardinal successful gross past year, up 40%. CSG brought successful astir $51 cardinal with maturation of astir 5%.