Analysts Flock to Upgrade DELL After Big AI-Server Guidance Boost
Dell Technologies (NYSE: DELL) might not be the most exciting stock regarding tech investing, but shares have been performing very well in 2025. Year-to-date, Dell shares have provided a total return of approximately 35%.
This significantly beats the approximately 13.5% return of the S&P 500 Index. Even when comparing directly to the tech sector, Dell has impressed. The 22% return of the Technology Select Sector SPDR Fund (NYSEARCA: XLK) trails Dell significantly.
Now, Dell investors have even more to cheer about. Below, we’ll detail why MarketBeat just tracked approximately ten Wall Street forecasters who boosted their price targets on Dell. Ultimately, what is the outlook for this stock playing a key role in the AI revolution?
Dell: Strong Performer Whose Outlook Just Got a Big Shot in the Arm
On Oct. 7, Dell held its 2025 Analyst Meeting. There, the firm said it now expects to grow much faster than it previously thought. Specifically, Dell significantly increased its annual revenue growth target, raising the figure from 3% to 4%, then to 7%, and finally to 9%. At the midpoint, the company more than doubled its revenue growth expectations from fiscal year (FY) 2027 to FY 2030.
Dell also massively lifted its adjusted diluted earnings per share (EPS) growth target. It now expects “15% or better” growth from FY27 to FY30, compared to a forecast of “8% or better” previously. Clearly, higher revenue and earnings growth expectations are great news for shareholders. Just as important is the length of this forecast, which extends over four years.
This is a significant win for long-term investors, providing confidence that Dell’s business will expand strongly for an extended period. However, where Dell expects its growth to come from may be one of the most promising aspects of its forecast.
Enterprise AI Servers: Dell’s Growth Engine
Dell’s boosted projections primarily come from its confidence in its Infrastructure Solutions Group (ISG), where the firm provides servers and storage to enterprise customers. The company now sees this part of its business growing by 12.5% annually at the midpoint, up from a previous midpoint of 7%.
Meanwhile, Dell sees its Client Solutions Group (CSG) growing at 2% to 3% annually. In CSG, the firm sells personal computers (PCs) and PC accessories to consumer and business customers.
Within ISG, Dell sees enterprise AI servers as its primary growth driver. This is a particularly good sign for the company. The PC and PC accessories market is highly saturated, limiting growth opportunities. However, enterprise AI servers are emerging, as fewer companies are active. Thus, these products can help reinvigorate Dell's growth.
Dell’s forecast is based on its belief that more companies will start investing in their AI infrastructure. This compares to running AI on a public cloud, like Microsoft (NASDAQ: MSFT) Azure. Investing in their own infrastructure allows companies to control costs by having an alternative if public cloud providers raise prices. It also keeps data in-house, creating security benefits. Dell has already helped over 3,000 enterprise customers deploy their own AI factories.
They have over 6,700 more in their pipeline. Dell sees this as the tip of the iceberg, believing that 90% of enterprises still have yet to deploy AI at scale.
This is a huge opportunity for Dell in the long term.
Analysts Eye 13% Upside in DELL; Stock Looks Poised to Succeed Through AI Servers
The MarketBeat consensus price target on Dell is approximately $160.50. This figure isn’t all that inspiring, implying only around 5% upside potential. However, examining price targets updated after Dell’s guidance boost shifts this picture significantly.
The average target is $173.20. This suggests that shares could rise by more than 13%. Given its increased forecast spans over four years, Dell’s longer-term potential is likely significantly greater than this.
Dell’s shares look reasonably priced, trading at a forward price-to-earnings (P/E) ratio of only 15x. With a large opportunity to capitalize on the enterprise AI server market over the next few years, Dell’s shares have a strong chance of performing well.
However, Dell’s key weakness is its lack of technological advantage. When Dell makes AI servers or PCs, it simply takes different hardware developed by third parties and packages them together. This makes it difficult to say that the company will consistently outperform the market.
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