Dell rises as Morgan Stanley ups target on AI server ramp

Dell Technologies (NYSE:DELL) shares rose 1% on Monday as Morgan Stanley upped its price target on the IT giant, citing a ramp up in artificial intelligence server sales.

“DELL’s AI server momentum remains strong, with our recent checks pointing to ~$20B of AI server revs in FY26, 56% higher than prior [Morgan Stanley estimates], driving $10.50 of EPS in FY26, 12% above Street,” analyst Erik Woodring wrote in a note to clients. “Probability of [roughly] $40B AI server bull case also higher given competitive landscape.”

Woodring upped his target to $154 from $136 and kept his Overweight rating on Dell.

Recent checks have shown that Dell’s momentum in AI servers came before any of the volatility related to Super Micro Computer (SMCI), Woodring said, adding that he now has a clearer picture of builds over the next 15 months. “This momentum primarily reflects strong customer demand, broad-based share gains, and repeat purchases from a handful of large T2 CSP customers (Tesla, xAI, CoreWeave etc.), alongside an emerging sovereign (i.e. Middle East sovereign wealth funds, US govt, etc.) and long-tailed enterprise AI opportunity,” Woodring wrote.

“And while some of the quarterly details into FY26/CY25 shipments are less clear now (but should get clearer over time), our checks make clear that DELL remains very well-positioned as AI Server momentum builds into the first deliveries of Blackwell in early 2025,” he continued, referencing Nvidia’s (NVDA) Blackwell line of GPUs.