Dell Technologies shares climbed Tuesday as another Wall Street analyst raised expectations for the company’s artificial-intelligence infrastructure business, reinforcing a growth story that has become substantially larger than investors were modeling only months ago.
The stock closed 3.9% higher at $574 after trading as high as $586.92, outperforming a broader market in which the S&P 500 gained about 0.6%. Dell’s move followed Mizuho analyst Vijay Rakesh raising his price target to $650 from $600 while maintaining an Outperform rating. The new target implies roughly 13% upside from Tuesday’s closing price, but the more important development behind the call is Dell’s rapidly expanding AI server business rather than the target itself.
Dell has already demonstrated that AI infrastructure demand is translating into unusually large orders, revenue and backlog. During its fiscal second quarter, the company booked $60.9 billion of AI server orders, generated $16.4 billion of AI-optimized server revenue and finished the period with $95 billion of AI server backlog. Management subsequently raised its fiscal 2027 AI server revenue forecast to $74 billion from $60 billion, compared with roughly $25 billion shipped during the previous fiscal year.
That acceleration has changed the scale of Dell’s financial outlook. The company now expects fiscal 2027 revenue of approximately $192 billion, up 69% from the prior year and $25 billion above the guidance it provided earlier in the year. Non-GAAP earnings per share are projected at $25.50, up from the previous $17.90 forecast and nearly 150% above fiscal 2026.
AI Servers Are Reshaping Dell’s Earnings Base
Dell’s latest results suggest the AI boom is doing more than adding a fast-growing product category. Infrastructure Solutions Group revenue climbed 89% year over year to $31.8 billion in the second quarter, with AI servers accounting for $16.4 billion. Traditional server and networking revenue more than doubled to $10.5 billion, while storage revenue increased 26% to $4.9 billion.
The higher volumes also produced stronger profitability. Infrastructure Solutions Group operating income rose 225% to $4.8 billion, lifting the segment’s operating margin to 15% from 8.8% a year earlier. Dell reported companywide revenue of $47 billion for the quarter, up 58%, while non-GAAP diluted EPS increased 203% to $7.04. Operating cash flow was $2.2 billion, and the company returned $4.3 billion to shareholders through dividends and repurchases.
Those numbers are important because AI servers have historically raised questions about whether enormous hardware revenue can generate attractive enough margins after accounting for expensive accelerators and component costs. Dell’s recent results indicate the infrastructure business is currently scaling profitably rather than simply adding low-margin volume, although product mix and component pricing remain variables that could change from quarter to quarter.
The size of the backlog provides substantial visibility, but it should not be treated as immediate revenue. Dell must still procure components, build systems, deliver them and recognize sales over time. Conversion speed will therefore matter as much as the headline backlog figure, particularly as customers undertaking large AI projects depend on financing, available power, data-center construction and access to high-end chips.
Dell Is Expanding Beyond the Server Rack
Dell also used Tuesday to broaden its AI strategy beyond hardware, announcing additions to its Dell AI Data Platform intended to help enterprises organize and process proprietary information for AI applications and autonomous agents.
The company is developing a Unified Semantic Layer, Enterprise Knowledge Graph and Knowledge Agents designed to give AI systems a more consistent view of corporate data. Dell also said its GPU-accelerated data-processing engine ran nearly four times faster on average than CPU-only processing in internal testing and more than 20 times faster on one batch-processing workload. Those figures are based on Dell’s own testing and should not be interpreted as guaranteed performance across customer environments.
Several of the platform’s major software features are not scheduled to arrive until the first half of 2027, making the announcement more relevant to Dell’s longer-term effort to capture additional spending around AI infrastructure than to near-term earnings. The strategy could nevertheless become important if Dell can sell customers storage, data management and services alongside the servers already driving its growth.
That would make each AI infrastructure deployment financially more valuable while reducing Dell’s dependence on server hardware alone.
The Next Test Is Backlog Conversion
Tuesday’s analyst action arrived during another strong session for AI-related equities, so Dell’s advance cannot be attributed exclusively to Mizuho’s price-target increase. The broader technology rally provided a favorable backdrop, while Dell’s own improving fundamentals gave investors a company-specific reason to participate. The shares remain below their Sept. 18 52-week high of $595.51 despite their recent advance.
Dell has guided for fiscal third-quarter revenue of approximately $49 billion, representing 81% year-over-year growth, with non-GAAP EPS of $6.50. Meeting those targets would reinforce the view that the second quarter was not simply an unusually strong period caused by the timing of a handful of large orders.
The larger question is how quickly Dell can turn its $95 billion AI backlog into profitable revenue while maintaining the margin improvement already visible in its infrastructure business. With the company now expecting $74 billion of AI server sales this fiscal year, another substantial change in orders, backlog conversion or profitability at the next earnings report could matter considerably more for the stock than the latest Wall Street price target.