Dell just turned in one of its strongest quarters in company history, and Wall Street is paying attention.
Revenue rose, profit soared, and demand for AI infrastructure kept climbing. Now one of Wall Street’s biggest names is raising its price target on the AI stock.
Goldman Sachs analyst Katherine Murphy raised her price target on Dell Technologies (DELL) to $570 from $510 while keeping a “Buy” rating, according to a research note first reported by TheFly.
Goldman Sachs is bullish on Dell stock
To understand why Goldman Sachs (GS) has raised its Dell stock price target, it helps to look at what the company reported in the recent quarter.
Dell posted revenue of $47 billion for its fiscal second quarter (ending in July), up 58% from a year earlier. Earnings per share came in at $7.04, up 203%.
Both numbers beat analyst expectations, and management raised guidance for the rest of the year.
The company’s Infrastructure Solutions Group, which includes AI servers, traditional servers, and storage, was the biggest driver.
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The segment brought in a record $31.8 billion in revenue, up 89%, with operating income more than tripling.
AI demand was the standout.
Dell booked $60.9 billion in AI server orders in the quarter alone, its best quarter ever for that metric, and ended the period with a backlog of $95 billion.
Over the past year, the company has booked more than $130 billion in AI server orders total.
Traditional servers grew even faster than AI servers on a percentage basis, up 122%, as businesses replace aging data center equipment.
Storage revenue rose 26%, marking six straight quarters of demand growth above the broader market.
What’s behind the Dell stock price target hike
Murphy pointed to a few specific factors behind the higher Dell stock price target. Her note credited the beat and raise to enterprise refresh activity and AI demand, along with better-than-expected profitability.
Here’s a quick breakdown of what she highlighted:
- Durable enterprise IT hardware demand tied to data center modernization
- Growing adoption of agentic AI across enterprise customers
- Accelerating AI server demand and order growth
- Operating margin outperformance driven by scale
- A more favorable mix of higher-margin storage products
Dell’s own management has said storage products built on the company’s proprietary technology, rather than partner brands, carry better margins. As that mix improves, profitability should expand.
Dell executives echoed that theme on the earnings call. Chief Operating Officer Jeff Clarke pointed to the sheer scale of the aging equipment still sitting in corporate data centers as a reason the growth has room to continue.
“We still have 1.2 million assets that are 14G or older in the install base,” Clarke told analysts. They have to be upgraded.”
Goldman Sachs expects a broader replacement cycle and accelerating AI spending to drive revenue and earnings higher.
According to consensus data compiled by Tikr.com, analysts tracking DELL stock forecast revenue to increase from $113.5 billion in fiscal 2026 (ending in January) to $277 billion in fiscal 2030.
In this period, adjusted earnings are projected to expand from $10.30 per share to $42.72 per share.
If DELL stock trades at 20x forward earnings, up from its current 17.7x multiple, it could surge roughly 90% over the next three years.
What’s next for Dell stock price?
Dell also raised its full-year outlook alongside the quarterly results.
The company now expects full-year revenue of $192 billion, up roughly 70% from the prior year, with earnings per share of $25.50, up about 150%.
Management said operating expenses are on pace to fall to about 8% of revenue for the year, the lowest level in the company’s 42-year history.
Lower overhead combined with higher revenue is a big part of why profits are growing faster than sales.
For investors watching Dell stock, the combination of a fresh price target increase, a maintained Buy rating, and management’s confidence in the second half of the year points to a company Wall Street believes still has room to run.
Whether that plays out will depend on Dell continuing to convert its growing AI backlog into actual shipped revenue, something the company will update investors on again next quarter.
Out of the 21 analysts covering Dell stock, 14 recommend “Buy”, and seven recommend “Hold”. The average Dell stock price target is $586, 19% above the current price.
Related: Morgan Stanley flags unexpected Dell stock update after earnings
