Dell’s AI Backlog Surge Positions Stock for $600+ as Server Revenue Doubles

Dell’s AI Backlog Surge Positions Stock for $600+ as Server Revenue Doubles Vandita Jadeja Fri, September 18, 2026 at 2:00 AM GMT+9 5 min read DELL +4.56% HPE +8.55% SMCI +10.27% Quick Read Dell (DELL) surged 336% in a year, yet still carries 16% upside to our $631 BUY target backed by a $95 billion AI backlog.

HPE's server growth of 35% and Supermicro's negative $6.8 billion operating cash flow make Dell's 122% server growth and 28x multiple look compelling.

CEO Jeff Clarke booked over $130 billion in AI server orders over 12 months, with AI projected to drive 75% of all data-center demand by 2030.

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Few names in the AI trade have quietly compounded like Dell Technologies (NYSE:DELL). Shares are up 335.77% year to date, yet the story is still early.

Our 24/7 Wall St. price target for Dell is $631.30, roughly 15.87% above the $543.56 close, with a buy recommendation and high (90%) confidence.

Dell has run 10.74% in the past month and 334.13% over the past year, trading near the $567.75 52-week high.

The catalyst was Q2 FY27 (reported September 1, 2026): revenue of $46.97 billion, up 57.75%, and non-GAAP EPS of $7.04 that beat consensus by 43.69%.

AI-Optimized Server revenue doubled to $16.40 billion, AI orders hit a record $60.90 billion, and backlog reached $95 billion. Management raised full-year FY27 revenue guidance by $25 billion to $192 billion and non-GAAP EPS to $25.50. Dell also joins the S&P 100, a passive-flow tailwind.

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The bull thesis rests on the pipeline. CEO Jeff Clarke said Dell has booked "more than $130 billion in AI server orders" over the last 12 months, and management sees AI representing 75% of all data-center demand by 2030. Full-year AI server revenue is guided to $74 billion, up 200%.

Non-GAAP operating margin already expanded to 12.6% from 7.7%, and ISG margin jumped to 15.0%. If enterprise adoption keeps compounding (Dell added 3,300 AI customers in three quarters), our bull-case scenario points to $722.76, a 32.65% return.

The bear case centers on mix-driven margin compression and cash conversion. Q2 free cash flow fell 47.22% year over year to $986 million, and shareholders' equity is negative $1.43 billion.

Supply is constrained across DRAM, NAND, CPUs, and optical components. Bulls counter that heavy working-capital build reflects a $95 billion backlog being staged as demand remains firm. Our bear-case one-year target is $471.53, a 13.46% drawdown.

Hewlett Packard Enterprise (NYSE:HPE) is the closest enterprise-infrastructure peer, but its Q3 FY26 revenue growth of 32.72% and FY27 EPS growth framework of 16%-20% trail Dell's 148% guided EPS growth. HPE's server segment grew just 35.3% versus Dell's traditional server growth of 122%.

Super Micro Computer (NASDAQ:SMCI) is the pure-play AI server comp, trading at a P/E of 10x, but FY26 operating cash flow was negative $6.81 billion and gross margin swung from 6.3% to 17.5% in two quarters.

Dell's 28x trailing multiple looks reasonable given its scale, cash returns, and diversified portfolio. The peer set makes our 24/7 Wall St. price target look measured given Dell's scale and diversified portfolio.

The 24/7 Wall St. price target of $631.30 with high confidence reflects a company converting a multi-year AI infrastructure cycle into real operating leverage. The setup strengthens if backlog conversion continues near the current pace and ISG margins hold above 15%.

The picture weakens if AI gross margins compress further while free cash flow keeps sliding. On balance, the data favors continued execution, and the same buildout powering Dell's backlog is lifting a wider set of suppliers we mapped in a free report on seven AI infrastructure names that aren't chipmakers.

These projections assume Dell continues executing on AI infrastructure demand at current guidance. Significant upside or downside could come from enterprise AI adoption rates, supply-chain relief, or margin trajectory as AI mix rises.

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