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Morgan Stanley maintained its Overweight rating on Dell Technologies (NYSE:DELL) and raised the price target on the stock to $126 from $89 ahead of the company’s first quarter fiscal 2026 results on May 29.
The firm noted that the market has already priced in solid results
Analysts led by Erik Woodring said to expect a slight April quarter beat but unchanged fiscal year guidance as Dell balances AI infrastructure momentum with mixed (positive leaning) traditional infrastructure checks and volatile tariff backdrop.
The analysts added that given limited near-term estimates upside and recent outperformance, the stock may take a breather at earnings, and noted that they still like the second half of the year setup.
The analysts said their AI server checks remain strong, with $2.3B of revenues in the April quarter and visibility into nearly $20B for fiscal year 2026, though quarter-over-quarter growth into the July quarter is dependent on supply.
Woodring and his team noted that traditional hardware checks are mixed but still positive leaning. The market growth is muted but Dell is taking share in the Infrastructure Solutions Group, or ISG, segment. However, the Client Solutions Group, or CSG, segment is more weighted towards the year’s first half.
This leaves a slight upside to first-quarter results, according to the analysts. Morgan Stanley is above the Street estimates for the second quarter, but could see a conservative guidance of about $2 of EPS in the July quarter (Morgan Stanley’s estimate is $2.10), the analysts added.
Woodring and his team do not expect Dell’s management to raise fiscal 2026 guidance this quarter.
Shares of Dell rose about 1% on Wednesday.