Multiple investment banks raise target price: Dell Technologies, Inc. Class C Technology (DELL.US) guidance exceeds expectations, igniting optimism and causing pre-market stock price to soar by over 15%.

Notice that, Dell Technologies, Inc. Class C technology (DELL.US) became the focus of the market on Friday, as the tech giant announced better-than-expected performance and performance guidance, earning praise from Wall Street. Dell Technologies, Inc. Class C's stock price surged over 15% in pre-market trading on Friday, with Dell Technologies, Inc. Class C up 15.20% in pre-market trading, at $139.91. Looking ahead to the first quarter of the 2027 fiscal year, Dell Technologies, Inc. Class C expects adjusted earnings per share to be $2.90, with sales expected to be between $34.7 billion and $35.7 billion. This includes $13 billion in AI server revenue, a number described as surprising by Bank of America Corp. Bank of America analyst Mohan stated, "While most investors were expecting the company to significantly cut its previously communicated 15% EPS growth expectation for the 2027 fiscal year, Dell Technologies, Inc. Class C took a different approach and provided a 25% growth guidance," "Although the short-term performance is obviously strong, we are not sure what demand elasticity will result from Dell Technologies, Inc. Class C's rapid and substantial price action. Our model shows weaker performance in the second half of the year compared to the first half (and guidance), which may ultimately prove to be conservative (especially considering the track record of management). Management acknowledges significant headwinds and potential demand pull-forward, but the growth in AI demand may prove to be a mitigating factor (even though AI server revenue has already achieved about 100% strong year-over-year growth)." Mohan reiterated his "buy" rating on Dell Technologies, Inc. Class C and raised his target price from $135 to $155. For the full year, Dell Technologies, Inc. Class C stated that sales for its Infrastructure Solutions Group (ISG) containing the AI server business should grow by around 40%, partly due to the 100% growth in AI server revenue. Dell Technologies, Inc. Class C also mentioned that traditional server and storage business is expected to grow in the single digits. JPMorgan analyst Sameek Chatterjee also praised Dell Technologies, Inc. Class C after the earnings report and raised his target price from $155 to $165. Chatterjee said, "Dell Technologies, Inc. Class C's outlook will show investors how outstanding execution helps the company navigate significant cyclical headwinds. Management raised the profit growth expectations for the 2027 fiscal year by 25% year over year, which is completely opposite of what most investors previously expected the company to do by downgrading the original 15% growth outlook," "Additionally, Dell Technologies, Inc. Class C's outlook also includes margin improvement in core business segments other than AI, thanks to higher profit margins of new traditional server platforms and storage margin improvements from the continued shift to Dell Technologies, Inc. Class C's proprietary intellectual property (IP), while balancing profitability and market share in the Client Solutions Group (CSG) business." Analyst Eric Woodlin from Morgan Stanley's analysis was more cautious, as he believes Dell Technologies, Inc. Class C has not completely escaped the "once-in-a-generation storage cycle" crisis. "As we have said before, Dell Technologies, Inc. Class C has a strong track record in execution, an extremely robust AI server business, and superior supply chain management compared to peers," Woodlin wrote in a report to clients. "But our EPS forecast of $10.97 for the 2027 fiscal year is still far below the management's non-GAAP guidance of $12.90. Why is that? Because we conceptually struggle to understand how Dell Technologies, Inc. Class C can achieve multiple significant price increases throughout the year, drive gross margin expansion over 200 basis points year over year, and see only limited demand elasticity when excluding AI servers." Nevertheless, Woodlin, who gave Dell Technologies, Inc. Class C a "hold" rating, did acknowledge that the company's demand for AI servers is "extremely strong," exceeding even his expectations. Therefore, he raised his target price from $101 to $110. "Grace Blackwell's orders are leading in Dell Technologies, Inc. Class C's AI server backlog, and management mentioned interest in Vera Rubin has been reflected in potential order pipelines," Woodlin added. "In addition, Dell Technologies, Inc. Class C expects these orders to maintain profit margins in the mid-single digits, which will translate to around $2 billion to $2.5 billion in revenue, with AI servers contributing approximately $2.80 in earnings per share in the 2027 fiscal year. While we are cautious about the impact of memory inflation, we have a hold rating on Dell Technologies, Inc. Class C, but this is clearly a major highlight for the business entering the 2027 fiscal year."