Dell Technologies (DELL) shares reached a record high of $567.75 on Friday before closing near $566.62, representing an 11.8% gain from Thursday’s close of $506.62. Trading volume was 71% above the stock’s typical daily level.

The advance followed RBC Capital Markets’ initiation of coverage on Dell with an Outperform rating and a $640 price target. RBC identified enterprise artificial intelligence spending, infrastructure modernization, growth in storage solutions, and personal computer replacement cycles as key factors supporting the company’s position.

Other firms also raised their targets or maintained positive ratings. Goldman Sachs increased its price forecast from $510 to $570 while retaining its Buy recommendation. Barclays lifted its target from $550 to $603 and maintained an Overweight rating. Fox Advisors upgraded Dell from Equal Weight to Overweight and assigned a $625 price objective.

Dell’s latest quarterly results, released September 1, exceeded Wall Street expectations. The company reported earnings per share of $7.04, compared with the analyst consensus of $4.91. Revenue reached $46.97 billion, a 57.7% increase from the same period a year earlier.

AI infrastructure drives order growth

Dell’s artificial intelligence server order book increased to $60.9 billion, contributing to a total backlog approaching $95 billion. Revenue from AI-optimized servers doubled sequentially to $16.4 billion in the latest quarter. The order-book and backlog figures represent demand awaiting fulfillment, making the company’s ability to convert those commitments into delivered revenue an important operating metric.

The company set fiscal year 2027 earnings guidance at $25.50 per share and issued third-quarter guidance of $6.50 per share. Oracle’s recently announced $95 billion infrastructure investment initiative has also increased attention on suppliers of AI hardware. Dell is a primary supplier of servers powered by Nvidia technology and serves both cloud hyperscalers and enterprise customers.

Dell currently has a market capitalization of $367.23 billion, a price-to-earnings multiple of 32.89, and a beta of 1.34. Its 50-day moving average is $447.99.

Michael Dell rises in wealth rankings

The stock’s Friday gain increased founder and CEO Michael Dell’s estimated wealth by more than 6% to $274 billion, placing him slightly ahead of Amazon founder Jeff Bezos, whose estimated wealth was $273 billion, on Forbes’ live billionaire tracker. Dell and Bezos exchanged the third position several times during the week.

Dell briefly moved ahead of Larry Page on Wednesday before falling back. Page’s estimated fortune stood at $279 billion on Friday. Tesla CEO Elon Musk remained in first place with an estimated net worth of $916 billion.

The company also faces potential challenges. Several insiders have recently sold shares, including entities connected to Silver Lake that reduced their stakes by more than 53% and 58%, respectively. Combined insider sales amounted to 1.3 million shares valued at more than $624 million over the past three months.

Dell is also preparing a $4 billion bond issuance to refinance debt. The offering could draw scrutiny regarding its effects on financial leverage and liquidity. Supply constraints affecting AI components remain another challenge, while the stock’s valuation has risen substantially following its recent appreciation. Upcoming company updates will provide further information on order conversion, component availability, and the debt refinancing.

The collective Wall Street view is currently Moderate Buy, with a mean price target of $560.24 from 36 analysts covering the company. Dell pays a quarterly dividend of $0.63 per share, equivalent to an annualized payout of $2.52 and a yield of 0.4%.

Source: Blockonomi