Dell Shares Climb as Bank of America Predicts Strong Q1 Beat Driven by AI Server Demand
Dell Shares Climb as Bank of America Predicts Strong Q1 Beat Driven by AI Server Demand
Dell Technologies Inc is expected to deliver stronger-than-anticipated first-quarter results, according to analysts at Bank of America, who believe the company could beat Wall Street expectations and raise its full-year guidance.
The positive outlook is mainly linked to continued demand for artificial intelligence servers, improving infrastructure revenue, and better-than-expected trends in the personal computer market.
Bank of America Raises Dell Price Target
Bank of America maintained its Buy rating on Dell shares and lifted its price target to $280 from $246. The analysts pointed to strong execution, rising AI-related demand, and healthier PC sales in the first half of the year as key reasons for the upgrade.
Dell shares rose around 4% to trade near $245 on Wednesday. The stock has gained about 95% so far in 2026, showing strong investor confidence in the company’s AI-driven growth story.
AI Servers Remain the Main Growth Engine
The strongest part of Dell’s business remains its Infrastructure Solutions Group, especially AI servers. Bank of America expects Dell’s AI server revenue to reach about $15 billion in the first quarter, with orders of roughly $20 billion and backlog close to $49 billion.
The bank also kept its fiscal 2027 AI server revenue forecast at $60 billion, which is higher than Dell’s own guidance of $50 billion. This suggests analysts believe enterprise AI adoption is still in its early stages and could continue supporting Dell’s growth for several years.
Q2 Guidance Could Beat Market Expectations
Bank of America expects Dell to issue second-quarter revenue guidance between $37 billion and $40 billion, compared with Wall Street expectations of around $35 billion. Expected earnings per share are estimated between $2.85 and $3.05, slightly above consensus expectations near $2.87.
For the full fiscal year, analysts believe Dell may raise its revenue outlook to between $143 billion and $147 billion. Adjusted earnings per share guidance could also move higher, possibly reaching a range of $12.85 to $13.25.
PC Business Shows Short-Term Strength
Dell’s Client Solutions Group, which includes PCs, has also performed better than expected in the first half of the year. Bank of America believes some customers may have brought purchases forward, helping support stronger revenue growth.
The firm now expects first-half client revenue to grow by about 20%, supported by higher average selling prices and moderate unit growth. However, analysts warned that PC demand may slow in the second half, with revenue potentially falling by around 12% as unit volumes weaken.
Enterprise AI Adoption Still in Early Stage
Analysts highlighted that growing demand from tier-two cloud service providers is helping Dell. These customers are investing more in AI inferencing systems and CPU-heavy hardware, which plays into Dell’s strengths as a large-scale infrastructure supplier.
Still, there are risks. Bank of America noted that enterprise infrastructure spending could cool later in the year if higher prices begin to weigh on demand. Even so, the overall tone remains positive, with analysts seeing Dell as one of the major beneficiaries of the AI infrastructure cycle.
Long-Term Forecasts Move Higher
Bank of America also raised its long-term estimates for Dell. The firm increased its fiscal 2027 revenue forecast to $152 billion from $147 billion, while lifting its earnings estimate to $13.22 per share from $13.04.
This reflects confidence that Dell can continue benefiting from rising AI server demand, stronger infrastructure sales, and steady execution across its core businesses.
Conclusion
Dell is heading into its first-quarter earnings report with strong momentum. Bank of America expects the company to beat expectations, raise guidance, and continue benefiting from powerful demand for AI servers. While PC demand and enterprise spending may slow later in the year, Dell’s position in AI infrastructure gives investors a clear reason to remain optimistic.
Note: This article is for informational purposes only and should not be considered investment advice.
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