Dell (NYSE: DELL) stock has fallen 18.2% this week, last closing at $473.39 on October 15 after losing no less than 11% in the previous session. Is the stock a buy, hold, or sell?
According to the latest Wall Street call, the answer is hold, as Barclays analyst Tim Long downgraded the stock from “Overweight” to “Equal-Weight” and reduced his Dell share price target from $603 to $574 on October 15.
The downgrade, which was largely responsible for the previous sessions’s downtick, reflected concerns that the company’s valuation had become far too stretched and that broader spending had yet to benefit meaningfully from artificial intelligence (AI) adoption.
Investors have also noted that while Dell’s AI server backlog still remains substantial, and its latest quarterly results demonstrate strong growth, the evidence that management can convert it into revenue appears slim.
Dell stock price one-week chart. Source: Finbold
A buy case for Dell stock
Despite the recent downgrade, however, Dell price targets remain optimistic, and even the reduced Barclays target suggests 20% upside. This suggests that the downgrade does not necessarily imply that Dell’s long-term prospects are in the dumpster but merely highlights a more cautious approach to the stock.
Moreover, Dell’s fiscal second quarter of 2027 was its strongest quarter on record. Total revenue surged 58% year over year to $47.0 billion, demonstrating the scale of the opportunity in AI infrastructure.
The Infrastructure Solutions Group was the primary growth engine, generating $31.8 billion in revenue alone, an increase of 89% from the prior year. AI-optimized server revenue reached $16.4 billion, doubling year over year, while operating income climbed 204% to $5.39 billion.
Management has also raised fiscal 2027 revenue guidance by $25 billion, now expecting a total revenue of $192 billion, with AI server revenue of $74 billion. As for fiscal Q3, it forecasts revenue of $49 billion, representing 81% year-over-year growth.
Together, these figures demonstrate accelerating demand, revenue growth, and improving profitability. In other words, the Dell stock price decline might suggest that investors are trying to figure how much momentum can be sustained.
No Wall Street analyst thinks it’s time to sell
For comparison, the average Wall Street Dell price forecast for the next 12 months sits at $596 – a 26% upside, per TipRanks. Over the past three months, analysts tracked by the platform have collectively rated the company a “Moderate Buy,” with 14 “Buy” and seven “Hold” recommendations. Notably, no analyst suggested selling.
Dell stock 12-month forecast. Source: TipRanks
This shows the market could be bearish on Dell in the short term but optimistic in the long run thanks to strong underlying fundamentals. That is, the sharp decline witnessed over the past couple of days appears consistent with a high-profile downgrade, but it does not constitute evidence that the overarching narrative is losing steam.
Indeed, while success is not guaranteed, Dell’s record results, $95 billion AI server backlog, and higher fiscal 2027 guidance all provide substantial support for the long-term investment thesis. How the story progresses in the near-term will depend on the upcoming quarter results scheduled for next month.
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