Dell Technologies stock soared 22% after the company blew past fourth-quarter expectations and delivered guidance that left analysts scrambling to revise their models.
JPMorgan responded by hiking its Dell (DELL) stock price target to $165 from $155, and that move is worth paying close attention to.
The firm kept its “Overweight” rating on the dividend stock, pointing to Dell’s positioning in the AI-driven compute investment cycle as the core reason for its bullish stance.
JPMorgan bets on Dell’s AI runway
JPMorgan’s confidence in Dell comes down to one thing: its Infrastructure Solutions Group, or ISG.
The investment bank sees stronger-than-expected growth in ISG, led by a booming compute investment cycle.
According to JPMorgan, that puts Dell on a path toward double-digit earnings growth, even as its PC and general-purpose server businesses face pressure from macroeconomic headwinds.
Related: Bank of America revamps Dell stock target after earnings
The bank also sees upside in Dell’s valuation, arguing the stock deserves a higher multiple than its historical average, given its deep exposure to AI infrastructure spending.
That said, JPMorgan noted Dell is unlikely to be perceived as a primary beneficiary of the AI megatrend the way Nvidia (NVDA) or other chip-focused names are. But that doesn’t mean the opportunity isn’t real.
Dell closed fiscal 2026 with $43 billion in AI server backlog, a record, and $64.1 billion in total AI orders for the year.
In Q4 alone, it booked a staggering $34.1 billion in AI orders, shipped $9.5 billion in AI servers, and reported $9 billion in AI server revenue.
Dell hikes dividend by 20%
Del reported a cash flow of $11 billion in fiscal 2026, while its annual dividend expense was around $1.3 billion.
Dell returned$7.5 billion to shareholders over the last 12 months, including the repurchase of 54 million shares, more than double the number repurchased in fiscal 2025.
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A low payout ratio should translate to consistent dividend hikes. The server maker raised its annual dividend 20% to $2.52 per share, and the board approved a new $10 billion share repurchase authorization.
Analysts forecast Dell to increase the annual dividend to $3.35 per share in fiscal 2030.
A snapshot of key Dell dividend metrics:
- Annual dividend per share: $2.52 (raised 20% for fiscal 2027)
- Dividend yield: Approximately 1.7% (based on share price near $148)
- Payout ratio: Low, supported by strong free cash flow generation
- Capital returned to shareholders (fiscal 2026): $7.5 billion
- Share repurchase authorization: $10 billion (newly approved)
Dell’s record quarter tells the story
Dell’s fiscal Q4 was the strongest in company history.
- Revenuehit $33.4 billion, up 39% year-over-year (YoY), topping the $31.73 billion Wall Street expected.
- Adjusted earnings per share came in at $3.89, crushing the $3.53 consensus estimate.
- Full-year revenue reached $113.5 billion, up 19%.
- Earnings per share grew 27% to $10.30.
For fiscal 2027, Dell is guiding for revenue between $138 billion and $142 billion. That’s well above the $124.7 billion analysts expected.
AI server revenue alone is projected to hit $50 billion, roughly a 100% year-over-year growth.
However, a historic memory chip shortage is pushing up component costs across the industry, putting pressure on margins in both PCs and traditional servers.
Dell COO Jeff Clarke said:
CFO David Kennedy added that the company has priced to “offset” those rising costs.
According to CNBC, competitor HP recently hit a 52-week low after flagging that memory costs had risen roughly 100% sequentially, and that memory now makes up about 35% of its PC bill of materials, double the level from a year ago.
What is the Dell stock price target?
Analysts tracking Dell forecast adjusted earnings to grow from $10.30 per share in fiscal 2026 to $22.23 in fiscal 2031.
If DELL stock is priced at 10.7x forward earnings, similar to its historical average, it should trade around $238 in early 2030, indicating an upside potential of 61% from current levels. If we adjust for dividends, cumulative returns could be closer to 70%.
Out of the 12 analysts covering DELL stock, 10 recommend “Buy”, one recommends “Hold”, and one recommends “Sell”. The average DELL stock price target is $160, around 8% above current levels.
Dell, with its scale, direct model, and long-standing supplier relationships, appears to be navigating the challenge better. But the pressure is real, and the second half of fiscal 2027 carries more uncertainty than the first.
For now, though, Dell is entering the new year with record backlog, surging AI demand, and a dividend that keeps climbing.
Related: Dell delivers jaw-dropping dividend news as AI sales accelerate
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