Dell surges 40% as blockbuster AI server demand triggers forecast upgrades

Dell Technologies (NYSE:DELL) saw its stock price jump nearly 40% in premarket trading on Friday following a significant upgrade to its annual revenue and profit forecasts. The company, based in Texas, now expects revenue between $165 billion and $169 billion for the year, up from its previous guidance of $138 billion to $142 billion, driven by surging demand for AI-powered servers. The company reported an 88% increase in total revenue for the fiscal first quarter, reaching $43.84 billion, which exceeded analyst estimates of $35.43 billion. Dell also raised its projection for AI-optimized server sales to $60 billion in fiscal 2027, up from a prior target of $50 billion. The upgrades reflect Dell’s growing role as a key supplier of AI infrastructure for major cloud providers like Alphabet and Amazon.com. Analysts at Morgan Stanley called the results 'one of the most impressive quarters' in hardware, highlighting strong demand across the AI component market. Wall Street responded with immediate target price upgrades, with a median price target of $236.50 and 19 of 28 analysts rating Dell a 'Buy' or higher. The stock’s performance has outpaced the S&P 500 Index this year, more than doubling in value. The surge in Dell’s stock also lifted competitors in the AI hardware sector, with Super Micro Computer rising 10.7% and Hewlett Packard advancing 23.5% in early trading. The results underscore a broader shift in corporate spending toward physical AI infrastructure.