Dell's AI Outlook Bright Amid Market Jitters Ahead of Earnings Release

Dell Technologies Inc (DELL) shares are trading lower amid market jitters, despite a bullish outlook for its AI server business. Bank of America analyst Wamsi Mohan projects Dell's AI server sales to hit $20.7 billion in fiscal 2026, driven by the AI boom. Investors will be closely watching the company's earnings call on August 28 for confirmation of accelerated growth.

Dell Technologies Inc (DELL) shares are trading lower Wednesday afternoon, caught in a broader market downdraft that has particularly impacted technology and AI-related stocks. Despite the day’s weakness, recent analyst commentary and company updates paint a robust picture for Dell’s AI server business.

Bank of America analyst Wamsi Mohan recently reiterated a Buy rating and a $165 price target, projecting Dell will report revenue of $29.4 billion and EPS of $2.35 for the quarter, both above consensus estimates of $29.17 billion and $2.275, respectively. Mohan sees Dell's AI server sales hitting $20.7 billion in fiscal 2026, significantly exceeding the company’s guidance and projects long-term earnings could reach $19 per share by 2030, driven by the AI boom [1].

Investors will be closely watching the company's earnings call on August 28 for confirmation of accelerated growth. Dell Technologies has been leveraging the AI infrastructure boom to drive its growth. In the second quarter of fiscal 2025, the company achieved an 80% year-over-year revenue growth in servers and networking sales, reaching $7.7 billion. This growth was primarily driven by a strategic shift towards premium AI-optimized systems, which generated $3.1 billion in AI server shipments and a $3.8 billion order backlog [2].

Dell's focus on enterprise and Tier 2 cloud providers, a $120 billion market, provides a defensible niche in the competitive AI server market. The company's ecosystem partnerships, such as those with Intel and AMD for chip integration, offer flexibility to adapt to shifting technology trends [2].

While the market volatility may be temporary, investors should keep an eye on Dell’s strategic positioning and operational efficiency. The company's disciplined capital allocation strategy, returning $1 billion to shareholders in Q2, reflects both confidence in its cash-generating capabilities and a commitment to rewarding long-term investors [2].

References:
[1] https://www.benzinga.com/analyst-stock-ratings/reiteration/25/08/47159968/dell-poised-to-ride-ai-server-boom-toward-higher-sales-long-term-profit-growth-analyst
[2] https://www.ainvest.com/news/dell-technologies-ai-driven-infrastructure-surge-shareholder-returns-2508/