Dell Technologies: The AI Infrastructure Play with 85% On-Premise Growth and Wall Street’s Bullish Backing

Dell Technologies (DELL) is rapidly cementing its position as the go-to provider of enterprise AI infrastructure, capitalizing on a seismic shift toward on-premise Gen AI deployments. With Wall Street analysts rallying behind its $120–$150 price targets and a May 29 earnings report on the horizon, Dell presents a compelling opportunity to invest in a company poised to dominate a $250 billion AI infrastructure market. Here’s why investors should act now.

Strategic Product Launches: The Hardware Edge in AI

Dell’s recent advancements in AI-optimized hardware and partnerships with NVIDIA are unmatched. Its PowerEdge XE9780/XE9785 servers—available in air-cooled and liquid-cooled variants—support up to 256 NVIDIA Blackwell GPUs per rack, delivering four times faster LLM training compared to prior models. The XE9712 server, launching this quarter, offers 50x more AI inference output and 80% lower latency via NVIDIA’s GB300 NVL72 GPUs.

For edge computing, Dell’s Pro Max Plus laptop with Qualcomm’s AI 100 card enables real-time inference at retail and manufacturing sites. Meanwhile, its PowerCool liquid-cooling technology slashes data center energy costs by 60%, making it a critical tool for enterprises battling rising power bills.

Financial Resilience: Growth Amid Turbulence

Despite macroeconomic headwinds, Dell’s Infrastructure Solutions Group (ISG) delivered 80% year-over-year revenue growth in Q2 2025, driven by AI server sales. AI-optimized server revenue hit $3.2 billion in Q2, a 23% sequential jump, with a $3.8 billion backlog and a pipeline “several multiples” larger. Even as storage revenue dipped slightly, non-GAAP EPS rose 9% to $1.89, showcasing margin expansion through higher-margin AI infrastructure.

While its Client Solutions Group (CSG) struggled with a 22% drop in consumer PC sales, Dell’s focus on commercial clients and AI-driven enterprise workloads ensures long-term stability. The dividend yield of 1.8% and $1 billion in shareholder returns this quarter underscore financial flexibility.

Wall Street’s Bullish Consensus

Analysts are unequivocal: Dell is a buy.

• Evercore ISI raised its price target to $120, citing “best-in-class AI infrastructure execution” and a $5.8 billion YTD AI server run rate.
• Mizuho upgraded shares to $145, emphasizing Dell’s 85% enterprise Gen AI on-premise shift thesis, which it claims is “materially underappreciated.”
• Bank of America went further, assigning a $150 target, arguing Dell’s liquid-cooled AI racks and NVIDIA partnerships position it to capture 60% of on-premise AI spending by 2027.

The $120–$150 consensus reflects a 30–60% upside from current levels, with few analysts factoring in Dell’s edge in data center thermal management or its $250B+ AI infrastructure TAM.

Valuation: Near Fair Value, but Room to Run

Dell trades at 0.8x sales, a discount to software peers like IBM (4x) or Oracle (8x). However, its ISG margins are expanding as AI servers (mid-teens margins) displace lower-margin PCs. A $150 price target implies 1.2x sales, still below peers but reasonable given its hardware-centric model.

The May 29 earnings report is a critical catalyst. Analysts expect Q3 AI server revenue to hit $4 billion, with Dell’s AI Factory 2.0 backlog validation and Project Lightning’s throughput gains (230% faster than rivals) to surprise to the upside.

Risks and Mitigation

• Tariff Risks: Dell’s reliance on Asian manufacturing could face headwinds, but its global supply chain diversification and U.S. production partnerships mitigate this.
• Hyperscaler Competition: AWS and Azure dominate cloud AI, but Dell’s on-premise TCO advantage (claimed 60% cheaper than cloud) and data gravity (75% of data stays on-premise) create a moat.

Investor Takeaway: Buy Dell Before Earnings

Dell’s AI infrastructure dominance, Wall Street consensus, and May earnings catalyst make it a must-watch play in the $250B AI infrastructure boom. With a dividend yield, strong ISG growth, and $150+ analyst targets, investors can lock in exposure to enterprise AI adoption at a reasonable valuation.

Act now—this is a stock primed to outperform when the AI revolution hits the enterprise.