Dell Technologies (NYSE: DELL) delivered a stronger-than-expected fiscal second-quarter 2027 report, reigniting investor interest in the stock.
The results sent Dell shares about 9% higher in extended trading after shares closed at $425, raising questions about whether the technology stock can sustain its momentum and if current levels present a buying opportunity.
Notably, Dell reported fiscal second-quarter revenue of $47 billion, up 58% year-over-year and ahead of expectations of about $45 billion. Adjusted EPS surged 203% to $7.04, easily beating analyst estimates near $4.90.
The results were driven by AI demand, with AI-optimized server revenue reaching $16.4 billion, record AI orders totaling $60.9 billion, and an AI backlog expanding to $95 billion.
Infrastructure Solutions Group revenue climbed 89%, supported by strong growth in servers, networking, and storage.
Following the quarter, Dell raised its fiscal 2027 outlook, projecting $192 billion in revenue, up about 69%, and non-GAAP EPS of $25.50, representing roughly 148% annual growth.
The upgraded outlook reinforces expectations that enterprise and hyperscale spending on AI infrastructure will remain strong despite concerns about a potential slowdown in data center investments.
DELL’s bullish case
The bullish case for Dell centers on its growing role in the AI infrastructure market. The company’s massive AI backlog, accelerating server sales, and higher guidance suggest demand continues to outpace supply.
Valuation also remains relatively attractive relative to its growth profile. At the current stock price, Dell trades at roughly 17 times its updated fiscal 2027 earnings guidance. That multiple appears reasonable given the company’s triple-digit earnings growth and expanding AI business.
Meanwhile, analysts responded swiftly to the earnings report, with all 14 firms tracked by AIStockSavvy raising their price targets after the release.
The average analyst target now stands at $584, implying about 37% upside from Dell’s closing price of $425. Melius issued the most bullish target at $735, while Bernstein, JPMorgan, and Raymond James raised their forecasts to $650, $635, and $617, respectively.
Barclays, Mizuho, BofA Securities, and Citi also lifted their targets to $600 or higher, reflecting growing confidence in Dell’s AI-driven growth.
The upgrades suggest Wall Street views Dell’s $95 billion AI backlog and raised guidance as evidence of sustained demand.
Dell stock risks
However, risks remain. Supply constraints, particularly for high-bandwidth memory and DRAM, continue to limit shipments.
AI servers also carry lower margins than traditional hardware, potentially weighing on profitability.
In addition, any slowdown in hyperscaler or enterprise AI spending could temper Dell’s growth after its rapid expansion in 2026.
