Dell (DELL) stock traded at $147.35, up 21.3% in late-morning trading , reaching its highest level in three months. The rally followed a strong earnings report and a bold forecast that AI server revenue will more than double by fiscal 2027. Investors responded swiftly. But what exactly drove such a sharp move? The answer starts with artificial intelligence infrastructure. AI Servers Drive Revenue Acceleration Dell Technologies projected that revenue from its AI server business will grow 103% to roughly $50 billion in fiscal 2027. The company also forecast total fiscal 2027 revenue between $138 billion and $142 billion, well above Wall Street expectations of $124.7 billion. Executives pointed to sustained demand for AI infrastructure as cloud providers and enterprises expand compute capacity. Data center equipment makers have benefited from rapid capital spending tied to AI development. Industry leaders expect to invest at least $630 billion this year in related infrastructure. Wall Street reacted quickly. At least seven brokerages raised price targets following the announcement. Analysts at JPMorgan Chase projected potential upside toward $165 over the next year, citing Dell’s leadership in AI compute for enterprise customers. With that outlook, investors appeared to price in stronger long-term growth. Earnings Beat Reinforces Momentum Dell reported adjusted fourth-quarter earnings of $3.89 per share, topping analyst expectations of $3.53. Revenue reached $33.38 billion, exceeding forecasts of $31.73 billion. The company also raised its cash dividend by 20% and authorized an additional $10 billion share repurchase program. Those moves signal confidence in cash flow and capital allocation discipline. Source: TENET RESEARCH via X Meanwhile, Dell continues to navigate a challenging memory market. Memory chip makers have prioritized high-bandwidth memory for AI processors produced by companies such as Nvidia, AMD, and Google. That shift has tightened supply for traditional PC components. Market researcher TrendForce recently revised its first-quarter 2026 dynamic random access memory price growth estimate to 90% to 95% quarter over quarter. Rising component costs have pressured hardware manufacturers across the industry. Dell addressed those pressures by increasing PC prices last year. Executives stated that pricing actions aim to offset input cost inflation. However, analysts have questioned whether higher prices could weigh on demand if consumers push back. Performance Stands Out Over the past year, Dell shares have outperformed competitors such as HP Inc. and Lenovo Group. Trailing returns highlight the trend. Dell delivered a 39.10% one-year return compared with 17.14% for the S&P 500. Over three years, Dell gained nearly 281%, far exceeding the broader index. Technicals also note that the latest rally invalidated a previously observed head-and-shoulders pattern on the weekly chart. Some market participants now monitor whether shares can flip key moving averages into support. Source: Mentoviax via X Still, the core narrative centers on AI growth. If AI server revenue reaches $50 billion as projected, Dell would deepen its role in enterprise infrastructure. The stock now trades near recent highs and investors must weigh accelerating AI demand against persistent component cost pressures. Also, the market appears focused on growth, and of that momentum sustains, we could see new highs soon.
