Raymond James Lifts Dell Price Target on Long-Term AI Potential

Dell Technologies (NYSE:DELL) delivered an optimistic outlook for fiscal 2026, lifting its full-year profit guidance even as first-quarter earnings came in below expectations. The mixed results sent shares more than 1% higher intra-day today as investors looked past the earnings shortfall and focused on strong momentum in key growth areas.

For the first quarter, Dell reported adjusted earnings of $1.55 per share on revenue of $23.38 billion. While revenue exceeded analyst expectations, earnings fell short due to demand headwinds stemming from recently implemented tariffs.

Performance across business segments was uneven. The client solutions group, which includes personal computers and laptops, saw overall revenue rise 5% year-over-year, driven by strong commercial demand. However, consumer sales within the segment dropped 19%, signaling continued pressure in the retail PC space.

On the upside, Dell’s infrastructure solutions group posted a 12% revenue increase, while AI server orders soared to $12.1 billion—surpassing forecasts—and the company ended the quarter with a $14.4 billion backlog, suggesting continued strength in enterprise tech demand.

Looking ahead, Dell expects a robust second quarter, forecasting adjusted earnings of $2.25 per share and revenue between $28.5 billion and $29.5 billion, both ahead of consensus estimates.

For the full fiscal year, the company raised its profit forecast to $9.40 per share at the midpoint and expects revenue to land around $103 billion, signaling confidence in its ability to navigate a complex economic landscape while capitalizing on growth in AI and infrastructure solutions.

Raymond James raised its price target on Dell Technologies (NYSE:DELL) to $144 from $139, while reiterating an Outperform rating, reflecting confidence in the company’s long-term AI-driven growth despite some short-term headwinds.

The revision comes as the firm adjusts its estimates to account for delays in AI platform rollouts and accelerated PC demand, partly driven by tariff-related buying behavior. The transition between GPU generations in Dell’s AI infrastructure has been more turbulent than expected, increasing the risk of a near-term sales shortfall in AI-related products.

However, analysts remain optimistic about Dell’s positioning beyond 2025. As enterprise adoption of AI moves from training-intensive workloads to inferencing and real-world applications, Dell is seen as well-positioned to deliver sustained growth above historical levels.

With the company set to report earnings on May 29, investors may need to brace for some softness in AI segment results, but the broader story remains intact as AI infrastructure demand matures across the enterprise landscape.

Dell Technologies (NYSE:DELL) saw its shares drop more than 5% intra-day today after projecting a decline in adjusted gross margins for its fiscal 2026 year. The Texas-based company cited rising costs linked to AI server expansion and lukewarm demand for its PC segment as primary factors pressuring profitability.

Dell expects its full-year adjusted gross margin rate to decline by approximately 100 basis points. During a call with analysts, Chief Operating Officer Jeff Clarke also acknowledged the company is assessing potential cost impacts from proposed U.S. tariffs under President Donald Trump’s trade policies. Clarke suggested that if input costs increase, price adjustments may be necessary.

Despite margin concerns, Dell remains optimistic about AI-driven growth. The company forecasted a 53% year-over-year surge in AI server shipments, expecting to reach $15 billion in annual sales. These AI servers, powered by Nvidia chips, are positioned to compete with offerings from Super Micro Computer and are built to handle the heavy computational needs of AI training and deployment.

For the fourth quarter, Dell reported adjusted earnings per share of $2.68 on revenue of $23.93 billion, surpassing EPS estimates of $2.53 but falling short of the expected $24.56 billion in revenue.

Looking ahead, Dell provided a mixed outlook. The company projected current-quarter adjusted EPS of $1.65 and revenue between $22.5 billion and $23.5 billion, underperforming consensus estimates of $1.83 per share and $23.72 billion in revenue.

For fiscal 2026, Dell anticipates adjusted EPS of $9.30 on revenue between $101.0 billion and $105.0 billion, aligning closely with expectations of $9.29 EPS and $103.62 billion in revenue. While AI remains a bright spot, margin compression and macroeconomic uncertainty continue to be key concerns for investors.

Dell Technologies (NYSE:DELL) saw its shares drop more than 5% intra-day today after projecting a decline in adjusted gross margins for its fiscal 2026 year. The Texas-based company cited rising costs linked to AI server expansion and lukewarm demand for its PC segment as primary factors pressuring profitability.

Dell expects its full-year adjusted gross margin rate to decline by approximately 100 basis points. During a call with analysts, Chief Operating Officer Jeff Clarke also acknowledged the company is assessing potential cost impacts from proposed U.S. tariffs under President Donald Trump’s trade policies. Clarke suggested that if input costs increase, price adjustments may be necessary.

Despite margin concerns, Dell remains optimistic about AI-driven growth. The company forecasted a 53% year-over-year surge in AI server shipments, expecting to reach $15 billion in annual sales. These AI servers, powered by Nvidia chips, are positioned to compete with offerings from Super Micro Computer and are built to handle the heavy computational needs of AI training and deployment.

For the fourth quarter, Dell reported adjusted earnings per share of $2.68 on revenue of $23.93 billion, surpassing EPS estimates of $2.53 but falling short of the expected $24.56 billion in revenue.

Looking ahead, Dell provided a mixed outlook. The company projected current-quarter adjusted EPS of $1.65 and revenue between $22.5 billion and $23.5 billion, underperforming consensus estimates of $1.83 per share and $23.72 billion in revenue.

For fiscal 2026, Dell anticipates adjusted EPS of $9.30 on revenue between $101.0 billion and $105.0 billion, aligning closely with expectations of $9.29 EPS and $103.62 billion in revenue. While AI remains a bright spot, margin compression and macroeconomic uncertainty continue to be key concerns for investors.

Dell Technologies (NYSE:DELL) saw its shares tumble over 12% in pre-market today after issuing fourth-quarter revenue guidance that fell short of Wall Street expectations, driven by declining demand for traditional PCs and intensifying competition.

For the third quarter, Dell reported adjusted earnings per share (EPS) of $2.15, exceeding the Street consensus estimate of $2.06. However, revenue came in at $24.4 billion, below analyst projections of $24.69 billion.

Performance in the company’s client solutions group, which includes PCs and laptops, weighed on results, with revenue declining 1% year-over-year to $12.1 billion. The infrastructure solutions group, however, provided a bright spot, with revenue surging 34% year-over-year, fueled by robust AI-related demand. Meanwhile, consumer revenue slumped 18% to $2 billion.

Looking ahead, Dell projected fourth-quarter revenue in the range of $24 billion to $25 billion, missing the average analyst estimate of $25.57 billion. The subdued outlook, coupled with weakness in key segments, spurred investor concerns, leading to the sharp decline in Dell’s stock price.

Dell Technologies (NYSE:DELL) saw its shares tumble over 12% in pre-market today after issuing fourth-quarter revenue guidance that fell short of Wall Street expectations, driven by declining demand for traditional PCs and intensifying competition.

For the third quarter, Dell reported adjusted earnings per share (EPS) of $2.15, exceeding the Street consensus estimate of $2.06. However, revenue came in at $24.4 billion, below analyst projections of $24.69 billion.

Performance in the company’s client solutions group, which includes PCs and laptops, weighed on results, with revenue declining 1% year-over-year to $12.1 billion. The infrastructure solutions group, however, provided a bright spot, with revenue surging 34% year-over-year, fueled by robust AI-related demand. Meanwhile, consumer revenue slumped 18% to $2 billion.

Looking ahead, Dell projected fourth-quarter revenue in the range of $24 billion to $25 billion, missing the average analyst estimate of $25.57 billion. The subdued outlook, coupled with weakness in key segments, spurred investor concerns, leading to the sharp decline in Dell’s stock price.