Dell Technologies (DELL) is already benefiting from tremendous demand for its AI servers, and that trend is likely to continue to intensify for the foreseeable future. Further, despite the huge rally of DELL stock at 89% so far in 2026, the shares' valuation is still quite attractive. And finally, one of the company's key challenges is reportedly easing, while both Citi and JPMorgan recently issued very bullish notes on DELL stock.
In light of all of these points, value investors should consider buying the shares before May 28, when the venerable IT firm is slated to unveil its fiscal first-quarter results. The firm's Q1 ended on April 30.
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About Dell Technologies Stock
Dell Technologies is a leading U.S. multinational technology company, specializing in computers, servers, storage, and AI solutions. Formed by the 2016 merger of Dell and EMC, the firm is a key player in digital infrastructure, providing products for consumers and enterprises, including Alienware gaming PCs and PowerEdge servers. Dell's servers are used to run AI workloads, and hyperscalers and AI developers are among the major users of its servers.
Its market capitalization sits at $156.26 billion, while its forward price-to-earnings ratio was 20.84 times.
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www.barchart.com Dell's AI Servers Are a Hot Product
In its fourth quarter, the firm received a staggering $12.3 billion of orders for its AI servers, while its backlog for such servers reached $18.4 billion as of the end of last year. Amid the powerful demand for its AI servers, its overall revenue from AI-related products more than quadrupled in fiscal Q4, and it expects its sales of such products to jump 103% during this fiscal year to $50 billion.
The Demand for Dell's AI Servers Likely Soared in Q1 and Should Continue To Jump Going Forward
One of the specific, major positive catalysts driving the demand for Dell's products is the explosive proliferation of large language models (LLMs), including Claude, Anthropic's LLM and ChatGPT, OpenAI's LLM. In Q1, Anthropic's “revenue and usage” soared 80 times “on an annualized basis,” the latter company's CEO told CNBC earlier this month.
Further, the huge start-up is having difficulty keeping pace with the demand for its offerings. For its part, ChatGPT's revenue increased 128% in 2025.
With most experts saying that the AI Revolution is only in its early stages, LLM makers probably expanded by large amounts in Q1, and they are likely to continue to grow substantially going forward. As a result, Dell is poised to report superb Q1 results on May 28 and is well-positioned to sustain its growth for many years.
Additionally, in January, Dell CEO Michael Dell told CNBC that he expects his company's earnings per share to “grow by double digit (percentage levels) over the next five years," noting that ”the outlook for our business is great."
An Attractive Valuation
In accordance with Michael Dell's upbeat forecast, analysts on average expect the company's EPS to soar 28.65% to $11.90 during its current 2027 fiscal year before increasing another 12.35% to $13.37 during fiscal year 2028. Given the firm's strong outlook, its forward price-to-earnings ratio of 20.84 times is both low and attractive.
Enthusiasm from Citi and JPMorgan
On May 14, Citi analyst Asiya Merchant increased her price target on the name to $290 from $235, largely due to her belief that the company can continue to benefit from “sustained AI/server momentum.” JPMorgan raised its price target on the shares to $280 from $205 while keeping an “Overweight” outlook on DELL. In addition to strong AI server growth, Dell is benefiting from the current plateauing of computer-memory costs, the bank asserted. Rapidly rising memory costs had been viewed as a key negative catalyst for the firm last year.
On the date of publication, Larry Ramer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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