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Dell in 'Strong' Position to Continue to Outperform Amid AI Infrastructure Buildout, Wedbush Says

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Dell in 'Strong' Position to Continue to Outperform Amid AI Infrastructure Buildout, Wedbush Says

Dell Technologies (DELL) is in a "strong" position to continue to outperform amid the ongoing artificial intelligence infrastructure buildout, Wedbush Securities said in a note.

Late Thursday, the computer maker raised its fiscal 2027 outlook after posting record first-quarter results that surpassed Wall Street's estimates amid a surge in demand for AI-optimized servers. The company secured $24.4 billion in AI orders and reported $16.1 billion of AI server revenue.

Dell shares were up 32% in Friday late-afternoon trade, stretching its year-to-date gains to nearly 231%.

"With over 5,000 AI server customers and continued conversations around price increases from supply constraints through (the second half of 2027, Dell has) a strong position to continue outperforming within the AI infrastructure buildout," Wedbush analyst Dan Ives said in a note e-mailed late Thursday. "Inference workloads are driving higher demand for traditional compute, and Dell is capitalizing on a new refresh opportunity on the horizon."

The company continues to see "exceptionally strong" opportunity in AI amid robust demand, Chief Operating Officer Jeff Clarke said on an earnings conference call, according to a FactSet transcript.

"We exited the quarter with a record $51.3 billion of AI backlog, and our pipeline continued to grow sequentially, and remains multiples of our backlog even after converting $24.4 billion into orders," Clarke said. "Demand continues to exceed supply with memory as the primary constraint. And we expect to exit the year with meaningful backlog."

Dell's new full-year revenue outlook calls for $165 billion to $169 billion. This includes $60 billion of AI-optimized server revenue, Chief Financial Officer David Kennedy said on the call.

"The AI infrastructure buildout is now moving beyond solely (graphics processing units), with demand for (central processing units) and now servers accelerating and outstripping existing supply, with more customers looking to refresh compute environments to support growing AI workloads," Ives said.

Price: $416.93, Change: $+99.88, Percent Change: +31.50%

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