BofA Global Research released an analyst note on Monday, boosting its outlook for Dell Technologies Inc. (NYSE: DELL). BofA research analyst Wamsi Mohan reiterated a Buy rating. He raised the price target to $280 from $246.
Expecting Strong First-Quarter Results
Dell reports its fiscal first-quarter earnings on May 28. Mohan expects a strong beat on revenue and earnings per share (EPS).
The analyst expects second-quarter guidance above street consensus. He forecasts second-quarter revenue between $37 billion and $40 billion. Mohan also projects second-quarter EPS between $2.85 and $3.
Unwavering AI Server Demand
Substantial demand for artificial intelligence servers drives the positive revisions. Mohan noted "steadfast demand from AI servers" in the first half of the year. He expects this momentum to continue through the second half.
BofA estimates first-quarter AI server revenue at $15 billion. Orders should hit $20 billion. The estimated backlog exiting the quarter stands at $49 billion. Mohan maintains a fiscal year 2027 AI server revenue forecast of $60 billion.
Shifting Trends In Hardware
The note details divergent hardware trends for the second half of the fiscal year. Enterprise demand for Industry Standard Servers (ISS) may slow due to price increases. However, Tier 2 Cloud Service Providers will accelerate orders. These providers require central processing unit (CPU)-intensive hardware for agentic AI and inferencing.
PC demand remains higher than expected in the first half of the year. Mohan raised the first-half Client Solutions Group revenue estimates to 20% growth. He still forecasts a 12% deceleration in the second half.
Valuation Reflects Enterprise Adoption
The higher price forecast reflects increased demand for AI servers and ISS. The $280 target uses a 17 times multiple on the calendar year 2027 EPS estimate of $16.03.
Mohan bases the Buy rating on early innings of enterprise AI adoption. Strong execution and higher storage intellectual property attach rates also support the thesis.
DELL Stock Price Activity: Dell Technologies shares were down 1.94% at $237.29 at the time of publication on Monday, according to Benzinga Pro data.