Dell Stock Is Surging on Its $95 Billion AI Backlog. Could DELL Hit $600 Next?
Dell just posted numbers that have analysts scrambling to reset their models, and a single metric buried in the earnings release explains why the stock could still have room to run despite already tripling this year.
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Shares of Dell Technologies (NYSE:DELL | DELL Price Prediction) are rewriting the AI infrastructure playbook after a monster fiscal second-quarter report that pushed the AI server backlog to a record $95 billion. With the stock up 240.76% year to date, the question is whether Dell has room to keep running.
Our 24/7 Wall St. price target for Dell is $643.25 over the next 12 months, implying 40.43% upside from the current $456.55 quote. Our model signal skews constructive, with confidence at a high 90%.
![An infographic from 24/7 Wall St. presenting a 12-month price prediction for Dell Technologies (NYSE: DELL). The current price is listed as $456.55, with a target price of $643.25, indicating a +40.43% upside. The recommendation is 'BUY' with 'High Confidence (90%)'. The 'How We Got There' section shows Trailing P/E-Based Price: $458.06, Forward P/E-Based Price: $629.31, and Analyst Consensus: $510.26, leading to a Weighted Base: $559.35. 'Our Adjustments' detail a 247Factor Adjustment: 1.15x, including Sector Momentum, Earnings Growth: 2.825x, and Sentiment Score: 79.58, resulting in a Final Target: $643.25. The 'Bull Case: What Could Go Right' lists AI Server Revenue tracks $74B FY27 guide, $95B Backlog converts on schedule, and Non-GAAP Operating Margin expansion holds, with a Bull Case Target: $721.29. The 'Bear Case: What Could Go Wrong' lists Free Cash Flow decline ($986M), Negative Shareholders' Equity (-$1.427B), and Hyperscaler concentration risk, with a Bear Case Target: $479.89. The bottom line reiterates [BUY] -> $643.25 (+40.43%) and mentions a 'Constructive setup driven by record AI backlog and strong execution, with 90% confidence.'](https://247wallst.com/wp-content/uploads/2026/09/dell-stock-is-surging-on-its-95-billion-ai-backlog-infographic-1788370213382.webp)
| Metric | Value |
|---|---|
| Current Price | $456.55 |
| 24/7 Wall St. Price Target | $643.25 |
| Upside | 40.43% |
| Model Signal | Constructive |
| Confidence Level | 90% |
A Record Backlog Rewrites the Growth Story
Dell just delivered $46.97 billion in Q2 FY27 revenue, up 57.8% year over year, with non-GAAP EPS of $7.04 beating estimates by 43.69%. AI-Optimized Server revenue doubled to $16.40 billion while orders hit a record $60.9 billion in the quarter alone. CEO Jeff Clarke noted that “over the past 12 months, we have booked more than $130 billion in AI server orders.“
Dell raised full-year FY27 revenue guidance to $192 billion, a $25 billion lift from the prior view. Even so, shares dipped 5.87% over the past week as investors digested a 47% free cash flow decline tied to working capital needs.
Bull Case for $700+
Bulls have a straightforward playbook. If AI server revenue tracks Dell’s $74 billion FY27 guide and the $95 billion backlog converts on schedule, FY28 EPS could push toward the high end of Street estimates at $25.58.
Non-GAAP operating margin expansion to 12.6% from 7.7% proves the AI mix can be profitable. Our bull-case model projects $721.29 at 12 months and reaches $606.36 in the base case by July 2027.
What Could Go Wrong
Free cash flow fell to $986 million, down 47%, as inventory builds soak up cash. Bulls counter that this reflects the ramp of the $95 billion backlog, so cash conversion should normalize. Shareholders’ equity sits at negative $1.427 billion, though aggressive buybacks ($3.796 billion in Q2) explain the optics.
AI server margins remain lower than traditional gear, and hyperscaler concentration is real (the same buildout is powering the seven non-chip AI infrastructure names we broke down in a free report). Our bear scenario lands at $479.89, barely above today.
How Dell Compares to HPE and Super Micro
Hewlett Packard Enterprise (NYSE:HPE) is the cleanest large-cap comp, competing directly in AI servers and enterprise infrastructure. HPE just posted Q2 FY26 revenue of $10.68 billion, up 40%, but at a $66.6 billion market cap it operates at less than half Dell’s scale.
Super Micro Computer (NASDAQ:SMCI) is the pure-play AI server comp with fiscal 2026 revenue near $39 billion and a trailing P/E of just 11, versus Dell’s 23. SMCI trades cheaper because of governance and margin concerns, while Dell offers scale, storage, and client solutions diversification. The peer set makes Dell’s valuation look reasonable rather than stretched, supporting our target.
| Company | Trailing P/E | Market Cap |
|---|---|---|
| Dell | 23 | $148B |
| HPE | high triple digits | $67B |
| SMCI | 11 | $24B |
Weighing the Setup From Here
Our 24/7 Wall St. price target of $643.25 reflects a business compounding faster than the market appreciates, backed by a $95 billion backlog and 90% model confidence.
The setup looks constructive if the AI backlog converts cleanly and margins hold above 12%. The picture weakens if free cash flow keeps deteriorating or a hyperscaler pauses. On balance, the risk-reward skews constructive.
| Year | 24/7 Wall St. Price Target |
|---|---|
| 2026 | $509 |
| 2027 | $660 |
| 2028 | $797 |
| 2029 | $933 |
| 2030 | $1,050 |
These projections assume Dell continues converting AI backlog into revenue at guided margins. Significant upside or downside could result from hyperscaler capex cycles or supply chain shifts around next-generation GPU platforms.
Contact [email protected] for any questions or corrections.
Vandita Jadeja is a financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis. She has contributed to several publications, including the Joy Wallet, Benzinga, The Motley Fool and InvestorPlace.
