Dell Technologies (DELL) has become a focal point for market analysts following its Q3 FY2026 earnings report and updated guidance, resulting in varied price target adjustments reflecting both optimism surrounding its AI server business and concerns about potential margin pressures.
Dell Price Targets
As of November 26, Dell Technologies stock is trading at $125.92, down $1.32 or -0.01% from the previous close. The stock movements reflect a mixed market reaction to recent news, with investors weighing strong AI prospects against potential headwinds.
BofA Securities raised its price target on Dell from $160 to $163, maintaining a “Buy” rating. The firm’s analysis, reported by The Fly, anticipates a 15% annual earnings per share (EPS) growth over the next five years, driven by Dell’s advantageous position in the AI server market. This projection is based on confidence that Dell will continue to exceed consensus revenue estimates for AI servers.
Dell’s Q3 FY2026 earnings revealed revenue of $27.01 billion, an 11% year-over-year increase, but slightly below analyst expectations of $27.27 billion. However, the company reported EPS of $2.59, surpassing the anticipated $2.48. The Infrastructure Solutions Group (ISG) stood out with a 24% revenue increase, fueled by robust AI server demand. Dell has increased its fiscal 2026 AI server revenue forecast to $25 billion, up from the previous $20 billion estimate, citing an AI server backlog reaching $18.4 billion, including $12.3 billion in new orders during Q3. Significant clients include the U.S. Department of Energy and Elon Musk’s xAI.
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Conversely, Morgan Stanley increased its price target for Dell to $113 from $110 but maintained an “Underweight” rating. While acknowledging Dell’s strong AI server performance, the firm expressed concerns about potential margin pressures arising from rising memory costs and potential supply shortages. Similarly, Aletheia Capital downgraded Dell’s stock to “Hold” before the Q3 earnings release, citing margin pressures from increased memory costs and potential risks from Nvidia’s AVAP initiatives, which could diminish Dell’s system-level customization value.
Dell Analyst Summary
Bull Case
- Strong AI server demand drives revenue and backlog growth.
- BofA projects 15% EPS growth over the next five years.
- Increased FY26 AI server revenue forecast to $25 billion.
Bear Case
- Morgan Stanley cites concerns about margin pressures.
- Aletheia Capital downgraded to ‘Hold’ due to cost concerns.
- Slight revenue miss in Q3 FY26 despite EPS beat.
The divergent analyst opinions highlight the complexities facing Dell. While the company is clearly benefiting from the surge in AI-related demand, its ability to manage costs and maintain its competitive edge in the face of evolving market dynamics remains a key concern for the markets.
