Dell (DELL) is just revving up after an eye-popping quarter.
The news: Goldman Sachs analyst Katherine Murphy reiterated a Buy rating on Dell in a note on Tuesday
Murphy set the price target at $500, implying about 15% more upside from current trading levels. Murphy points to three factors as likely further drivers of Dell’s already hot stock price: – Enterprise IT hardware spend is growing as companies race to upgrade infrastructure to support AI initiatives. – Dell’s strong fiscal year 2027 outlook is constrained by supply, not demand. That is often a combination for strong profit margins. – Dell’s operating margin outperformance demonstrates the benefits of the company’s scale and supply chain.
The analysis: Dell said last Thursday evening it sees $167 billion in fiscal year 2027 revenue, including a staggering $60 billion from AI server sales. That’s up sharply from a prior outlook of about $140 billion and blew past analysts’ average estimate of $142.1 billion. The numbers from the most recent quarter were almost hard to believe as well.