'Prescription for negativity': Dell shares soar on AI server sales data

The supplier of personal computers and data center equipment Dell Technologies significantly exceeded Wall Street's expectations for revenue and profit thanks to the rapid growth in demand for artificial intelligence technologies. After the report was published, Dell's quotes rose sharply, despite the negative background around its key partner - Nvidia.

Dell recorded a 39% jump in sales to $33.38 billion in the fourth quarter of fiscal 2026, which ended in January, largely driven by growth in its AI server business. The company expects that growth to continue into the new fiscal year. According to FactSet, analysts on average predicted $31.67 billion. Quarterly revenue specifically from sales of AI-optimized servers soared 342% to a record $9 billion. Adjusted earnings were $3.89 per share with a consensus forecast of $3.53, The Wall Street Journal reported.

For the new fiscal year, Dell projected revenue in the range of $138 billion to $142 billion and adjusted earnings of $12.9 per share in the middle of its guidance range. The figures were above the consensus of analysts who expected full-year sales of $124.69 billion and adjusted EPS of $11.45. For the current first fiscal quarter, Dell expects revenue of $34.7 billion to $35.7 billion and adjusted EPS of $2.9 in the middle of the range. Wall Street guided for $28.99 billion and $2.34, respectively, the WSJ notes.

"Opportunities in AI are transforming our company," Dell Chief Operating Officer Jeff Clark said in a statement. The company enters the new fiscal year "with a record $43 billion order book - powerful proof that our engineering leadership and differentiated AI solutions are winning," he added.

Dell shares, which have lost 3.5% in value since the beginning of 2026, jumped by 11.6% on the postmarket in New York after the publication of the quarterly report. In the morning of February 27, the growth of quotations accelerated up to 13% at the over-the-counter trades in the USA.

Dave Vellante, principal analyst at theCUBE Research, pointed to the symbiosis between Dell and Nvidia, with the former's financial success mirroring the latter's since Dell became one of Nvidia's main sales channels for AI chips. That said, Nvidia's own quarterly reporting this week was met with a much more subdued response from investors. "Dell seems to have a formula to overcome this negative mood [in the market]," the Silicon Angle website quoted an expert as saying.

"By addressing rising [server] memory costs early and showing early gains reflected in both its first-quarter results and full-year guidance, the company has shown that it is successfully working ahead of the challenges that continue to weigh on its competitors," Reuters quotes Gabelli Funds portfolio manager Hendy Susanto, whose fund is a Dell shareholder, as saying.

Last week, several investment banks lowered their target price for Dell stock, leaving their recommendations unchanged, MarketScreener reports.

Thus, Evercore ISI lowered the target from $180 to $160 and confirmed the previous rating Outperform (corresponds to the recommendation to buy securities), JPMorgan - from $170 to $155 with a similar rating (Overweight), Morgan Stanley - from $111 to $101 with Underweight rating (advice to sell), and Citigroup adjusted the target from $165 to $160, confirming the recommendation "buy" (Buy). At the same time, Morgan Stanley's target is kept below the current price: trades on February 26 ended at $121.45.

According to FactSet, the consensus rating on Dell stock is now "Outperform" (Overweight), and the average target price of $158.11 per paper implies a 30% upside.

This article was AI-translated and verified by a human editor