Dell Sees $43B AI Server Backlog as Price Target Rises to $155
BofA raised its price target on Dell from $135 to $155 after guiding fiscal 2027 EPS growth to 25%, above its prior 15% target. Dell posted $9 billion in Q4 AI server revenue, secured $34 billion in orders with a $43 billion backlog and projects $50 billion in AI server sales next fiscal year.
1. BofA Lifts Price Target
BofA Securities increased its price target on Dell from $135 to $155 and maintained a Buy rating, highlighting stronger-than-expected fiscal 2027 guidance as justification for the upgrade.
2. EPS Growth Outlook
Dell now guides fiscal 2027 EPS growth to 25%, up from a prior 15% target, reflecting robust early-year performance, though modeling suggests potential weakness in the second half.
3. AI Server Momentum
In fiscal Q4, Dell generated $9 billion in AI server revenue, booked $34 billion in new orders and carried a $43 billion AI server backlog into the new year, with management forecasting $50 billion in AI server sales for the next fiscal year.
4. Risks and Demand Considerations
The analyst cautions that Dell’s significant price increases could pressure demand elasticity, potentially leading to a softer second half, and notes that backlog conversion timing will be critical to sustaining momentum.