Dell’s AI Server Boom Sparks Massive Forecast Hike, Thrilling Wall Street
Dell Technologies has delivered a powerful message to the market: the artificial intelligence revolution is not slowing down. Following the release of its third-quarter fiscal 2026 results, the technology giant surprised investors by significantly boosting its full-year outlook, a move that prompted a wave of bullish analyst price target adjustments. The reason for the excitement is clear: a surging, almost unbelievable, demand for Dell’s high-powered AI servers.
While the company’s quarterly revenue of $27.01 billion slightly missed Wall Street’s consensus, its adjusted earnings per share of $2.59 easily beat expectations. The real story, however, was in the forward guidance, which pointed to a business firing on all cylinders in the AI space. Dell now projects its full-year revenue to land between $111.2 billion and $112.2 billion, a notable jump from its previous forecast. Even more telling, the adjusted earnings per share outlook was raised to an impressive $9.92 at the midpoint.
The $25 Billion AI Bet Pays Off
The core of Dell’s renewed momentum is its Infrastructure Solutions Group, particularly its AI-optimized servers. The company reported a record $12.3 billion in new AI server orders during the latest quarter, bringing the total order book for the year to an unprecedented $30 billion. This explosive growth compelled Dell to raise its fiscal 2026 AI server revenue forecast by 25 percent, from $20 billion to $25 billion.
What makes Dell’s position unique is its customer base. While much of the initial AI hardware frenzy centered on a few hyperscale cloud providers, Dell is now seeing accelerating demand from a diverse mix of “neocloud, sovereign and enterprise customers.” High-profile clients now include the U.S. Department of Energy and Elon Musk’s AI startup, xAI, cementing Dell’s role as a critical partner in the enterprise AI buildout.
Wall Street Reacts with Confidence
The strong performance and optimistic forecast immediately reverberated through the analyst community. Several firms increased their price targets on the stock, signaling stronger confidence in the company’s long-term trajectory. Goldman Sachs, for example, raised its target to a notably high $185 while maintaining a “Buy” rating, citing the stronger earnings guidance and improved AI server demand. Mizuho followed suit, moving its price target to $175 with an “Outperform” rating, based on the strengthening AI server pipeline, which it now estimates to be around $60 billion.
Despite the overwhelming optimism, there are still headwinds to watch. Analysts remain concerned about the global “memory supercycle,” a period of rising memory costs and potential supply shortages that could squeeze margins across the hardware industry. However, Dell management has indicated confidence in their ability to navigate these pressures, believing they can effectively procure supply and reprice products to maintain profitability. For now, the sheer force of the AI server wave is making Dell a standout player in the tech sector, proving that the infrastructure backbone of the intelligence era is a highly lucrative business.
