Dell Technologies Inc. (NYSE: DELL) has garnered attention on Wall Street as its AI server business shows remarkable growth. On November 26, Morgan Stanley raised its price target for the company from $110.00 to $113.00, while maintaining an “Underweight” rating on the stock. This adjustment reflects analysts’ recognition of Dell’s significant performance in the AI server sector, which is projected to account for more than 100% of the company’s fourth-quarter revenue guidance upside.
Analysts at Morgan Stanley noted that orders for AI servers surged by more than 150% during fiscal 2026, resulting in approximately $30 billion in orders so far this year. This upward momentum is expected to continue into fiscal 2027, with projections indicating that AI server revenue could increase by 50% to a total of $37 billion.
Despite this positive outlook, Dell faces challenges related to the ongoing memory supercycle. This phenomenon is causing price spikes and supply chain issues that could impact demand and margins in the upcoming fiscal year. According to Morgan Stanley analysts, the focus has shifted from the potential of AI servers to the effects of memory price inflation on Dell’s financial performance. They emphasized that Dell has properly contextualized the severity of the memory supercycle and acknowledged that cost increases will affect all product categories.
Investment Perspective on Dell Technologies
Dell Technologies provides a range of IT solutions, including servers, storage, networking, and personal computing devices, catering to both businesses and consumers globally. While Morgan Stanley acknowledges the growth potential of Dell, its analysts suggest that other AI stocks may offer greater opportunities for higher returns in a shorter time frame.
Investors seeking alternative AI stocks with significant upside potential are encouraged to explore options beyond Dell. The firm suggests that there are promising investments in the AI sector that may yield returns of up to 10,000%.
As the market evolves, Dell Technologies remains a key player in the technology landscape, with strong performance in AI servers juxtaposed against challenges posed by supply chain dynamics and pricing pressures. Investors will be closely watching how these factors influence Dell’s trajectory in the coming fiscal periods.
