Overview
- RBC Capital Markets initiated coverage in mid-September with an Outperform rating and a $640 price target, a move that helped lift Dell shares to record closes near $567.
- Dell reported a blockbuster fiscal second quarter with about $47 billion in revenue, $16.4 billion of AI server sales, and $7.04 adjusted earnings per share, and it raised full‑year revenue guidance to roughly $192 billion.
- RBC and other analysts point to a roughly $95 billion server order backlog as the core driver of the bullish thesis and say Dell’s supply‑chain capabilities give it an edge in AI infrastructure demand.
- Rapid growth is creating execution and working‑capital pressure: operating cash flow fell to about $2.2 billion, inventories rose to roughly $21.3 billion, and management must manage GPU and memory supply constraints to meet demand profitably.
- The market has repriced the stock after a more than 300% YTD gain, hedge fund ownership has increased, average analyst targets sit near $570, and future performance now depends on Dell’s speed and cost of converting the backlog into delivered, profitable servers.