BofA Raises Dell Stock Target to $600 on AI Demand and Supply Constraints

Bank of America Securities has raised its stock price target for Dell Technologies (NYSE: DELL) to $600, from a previous $505, while maintaining a Buy rating. The upgrade reflects growing confidence in the company’s ability to capitalize on accelerating demand for AI-driven infrastructure, driven by both supply constraints and long-term customer upgrades. Dell’s fiscal 2027 revenue guidance was also raised by $25 billion to $192 billion, with AI server revenue contributing $14 billion and Client Solutions Group (CSG) gains adding approximately $1 billion. Earnings per share (EPS) guidance for the year was increased by $7.60 to $25.50, underscoring stronger profitability expectations. The upgrade follows Dell’s recent fiscal second-quarter results, which exceeded analyst projections: revenue hit $47.0 billion (up 58% year-over-year), while adjusted earnings per share reached $7.04, surpassing estimates of $4.87. Key drivers included strong demand for AI servers, gains in storage solutions, and operational efficiencies. Supply constraints in DRAM, NAND flash memory, CPUs, and HDDs have widened the demand-supply gap by 30% in fiscal 2027, with a likely further tightening in fiscal 2028. Dell’s installed base of 1.2 million servers aged 14 years or older—set to be upgraded—further supports its long-term growth trajectory. The company’s Infrastructure Solutions Group (ISS) saw a 122% year-over-year increase, storage revenue grew 26%, and commercial PC demand rose 22%. Despite early-stage enterprise AI adoption, the upgrade reflects BofA’s belief in Dell’s positioning to benefit from both immediate upgrades and future AI-driven demand.