Dell (DELL) Hits $95 Billion Order Backlog 'Jackpot'...On the Brink of Breaking $500 with AI Servers

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Dell Technologies (DELL) surged by nearly 11%, moving closer to the $500 stock price mark, driven by an explosion in demand for artificial intelligence (AI) servers.

According to FXLeaders on September 2 (local time), Dell's stock price rose to approximately $461 during intraday trading. The increase neared 11%, and its market capitalization was projected to grow by approximately $23.26 billion. Dell's significant upward revision of its annual revenue and profit forecasts, prompted by the surging demand for AI-optimized servers, propelled the stock price.

Corporate investments in AI infrastructure are fueling Dell's growth. J.P. Morgan reported that Dell's new AI-related orders reached an all-time high of $60 billion. The total order backlog approached $95 billion. J.P. Morgan commented that the growth of the AI business “speaks for itself.”

Dell is expanding its AI infrastructure business based on systems equipped with NVIDIA (NVDA) chips. It is also participating in the construction of high-performance computing clusters for AI cloud companies such as Nscale and CoreWeave. Melius Research analyzed that the strength of the storage business also supports the growth of Dell's high-profit business segments. Melius raised Dell's target price to $735, the highest among broker forecasts compiled by LSEG.

Earnings forecasts have also been raised. According to FXLeaders, Dell increased its annual revenue forecast from the previous $96 billion to $102 billion. The adjusted earnings per share (EPS) forecast was also raised from $7.9 to $12.5. Second-quarter revenue was recorded at $27 billion, a 58% increase year-over-year, surpassing market expectations of $24.92 billion.

Anticipation for AI servers also spread to related hardware companies. Super Micro Computer (SMCI) rose by 2.2%, and Hewlett Packard Enterprise (HPE) increased by 1.4%. Dell has emerged as a key beneficiary of expanded AI infrastructure investment, driven by record-high AI orders and an order backlog approaching $95 billion.

[Article Summary]

-Dell's stock price surged to approximately $461, propelled by increased demand for AI servers and upward revisions of performance forecasts.

-J.P. Morgan cited $60 billion in new AI orders and a total order backlog of $95 billion as Dell's key growth drivers.

-Melius Research raised Dell's target price to $735, presenting the strongest outlook among brokerages.

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