Prediction: DELL Could Be Ready for Another Rally. Here’s Our Price Target

Dell Technologies (NYSE:DELL | DELL Price Prediction) has turned into one of the loudest AI infrastructure stories in the market. Shares are up 306.2% year to date, powered by a Q2 FY27 report that showed $47 billion in quarterly revenue, an AI backlog of $95B, and raised FY27 EPS guidance of $25.50.

The question I want to answer: can Dell push through $700 a share by 2027, or has this run already priced in the AI server boom?

Why Dell Shares Cooled Off This Week

After ripping higher through August, Dell has taken a breather. The stock is down 1.89% over the past week and closed the most recent session off 5.39%, even though it is still up 14.89% over the past month.

Two things are weighing on sentiment. First, gross margin pressure is a real concern as AI servers become a bigger share of the mix, with Q2 gross margin sitting around 20.9%.

Second, free cash flow actually fell 47.22% year over year to $986M in Q2 despite record revenue. With a beta of 1.409, Dell moves hard in both directions, and profit takers have been happy to trim.

Wall Street Sees 11% Upside. I Think That’s Too Cautious

The Street currently pegs Dell with an average analyst target of $564.46, based on 5 strong buys, 14 buys, 9 holds, and zero sells. Our own base case sits higher at $596.46, implying 17.78% upside with a confidence score of 0.9, which I’d translate as high conviction. The optimistic scenario stretches to $621.78.

With 68% of analysts bullish and year-over-year earnings growth running at 2.72, the consensus target looks like it was set before the last two earnings beats fully sank in. Analysts are still catching up to the numbers.

Path to $700 Per Share

Here’s the math on my stretch target. Reaching $700 from today’s price of $506.41 would require a gain of 38.2%. With forward EPS of $24.45, a price of $700 implies a forward P/E of 29x.

Our base case of $596.46 already implies 28x, meaning the bold target requires just 1.1x of additional multiple expansion.

That is a low bar if guidance keeps moving up. Full-year FY27 revenue guidance was raised by $25 billion to $192 billion at the midpoint, AI server revenue is now guided to $74B, and Jeff Clarke told investors, “We enter the second half with strong momentum and confidence in our position.”

Management expects AI to represent 75% of all data center demand by 2030, sizing the opportunity at more than a trillion dollars. Traditional servers grew 122%, storage grew 26%, and the 247Factor sector multiplier of 1.15 reflects those tailwinds.

The primary risk: DRAM and NAND supply constraints that Clarke flagged as “DRAM, DRAM, DRAM, followed by NAND, NAND, NAND.”

Where Dell Trades Today vs Its Earnings Power

At $506.41, Dell trades at a forward P/E of about 21x on $24.45 in forward EPS. For a business guiding to +148% non-GAAP EPS growth this year, that multiple is cheap.

Shares sit essentially at the 52-week high of $562.99 and well above the low of $109.70, and the 10-year return of 2508.14% shows this is a stock that compounds violently when earnings accelerate. Cheap growth stocks with $95B backlogs tend not to stay cheap.

Is $700 Realistic? My Verdict

Getting to $700 requires a 38.2% gain from here, and I think it is a stretch but not a long shot.

Three things need to go right: FY27 EPS lands at or above the $25.50 guide, ISG operating margin holds near 15%, and Dell converts more of the $95B backlog into revenue as supply loosens. A DRAM-driven miss or a sharp AI capex pause would derail it fast. Returns at this level shouldn’t be expected every year, but we’ve outlined the blueprint for how Dell Technologies could reach $700 in 2027.

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