Dell Technologies Set to Harness AI Server Growth for Future

Author: Thomas Cooper Updated: 08-15-2025 11:42 AM

Dell Technologies Positioned for AI Server Success

BofA Securities analyst Wamsi Mohan has reiterated a Buy rating on Dell Technologies (NYSE: DELL), projecting a significant price target of $165. The analyst's confidence comes as the company continues to show strength in the emerging AI server sector.

Projections Ahead of Earnings Reports

With Dell's fiscal second-quarter 2026 earnings scheduled shortly, Mohan forecasts impressive numbers. He predicts revenue reaching $29.4 billion with earnings per share (EPS) at $2.35, both estimates aligning with the upper bounds of the company’s guidance.

Growth in AI Server Sales

Mohan is particularly optimistic about AI server sales, which he estimates will contribute approximately $7.3 billion to Dell's revenue, while orders in this category are pegged at around $5 billion. This performance indicates a robust backlog of $12.1 billion at the end of the quarter.

Full-Year Estimates and Market Trends

Looking at the broader picture, the analyst expects full-year AI server sales to soar to $20.7 billion for fiscal 2026, exceeding Dell's prior guidance of $15 billion. Mohan believes Dell will likely revise its targets upward, aiming for at least $18 billion, with a potential breakout beyond $20 billion as new results emerge.

Strong Expectations for ISG and CSG

As for the Infrastructure Solutions Group (ISG), Mohan anticipates year-over-year revenue growth of 36%, driven significantly by AI server shipments. He expects ISG margins to improve sequentially, predicting margins of 9.3% in the second quarter.

Third-Quarter Forecasts

For the coming third quarter, the forecast includes revenue guidance of $27 billion to $28 billion, with an EPS expectation of $2.55. For the entire fiscal year 2026, the prediction stands at an EPS of $9.50 on revenue between $103 billion to $107 billion.

Client Solutions Group Insights

On the Client Solutions Group (CSG) front, Mohan projects revenue of $13 billion, reflecting a 5% increase year-over-year. This growth is largely attributed to an 8% rise in commercial PC sales influenced by pre-tariff demand shifts.

Long-Term Growth Outlook

Mohan's long-term outlook remains bullish, indicating a potential EPS exceeding $19 by 2030, driven primarily by AI server innovations and improved profit margins through an evolving product mix.

Current Market Performance

As of the latest report, Dell's shares are trading at $138.40, reflecting a slight decrease of 0.32% on the trading day. Despite the dip, the company's future appears promising as it leverages surging demand for AI server technologies.

Frequently Asked Questions

What is the main focus of Dell's expected revenue growth?

Dell's revenue growth is primarily driven by the AI server market, which is experiencing significant demand.

How much revenue is expected from AI servers this quarter?

Analysts predict AI server revenue will reach approximately $7.3 billion this quarter, with strong order backlogs indicating continued growth.

When does Dell plan to release its second-quarter financial results?

Dell is scheduled to announce its fiscal second-quarter 2026 earnings soon, generating anticipation in the financial community.

What are the projected earnings for fiscal year 2026?

For fiscal year 2026, projections estimate an EPS of $9.50 on revenues between $103 billion and $107 billion.

What long-term financial outlook is provided for Dell?

The long-term outlook suggests Dell's EPS could exceed $19 by 2030, indicating strong growth driven by AI server sales and product improvements.

About The Author

Hello, I'm Thomas Cooper, a financial expert and writer passionate about helping people understand and navigate the financial world. Having a solid financial background and a lot of experience, my area of expertise is simplifying difficult financial ideas into useful, understandable guidance. My goal with my writings and blog entries is to provide you the information and resources you need to make wise financial choices.

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