This AI server stock is set for a 50% rally, according to Bernstein

Dell Technologies is set to become a beneficiary of emerging artificial intelligence use cases, according to Bernstein. The investment firm reiterated its outperform rating on the technology stock and raised its price target to $220 from $180. Shares of Dell have surged 17% this year and are up more than 60% in the past 12 months. Bernstein’s revised price forecast implies an upside of 53% for the stock. DELL 1Y mountain DELL 1Y chart Bernstein analyst Mark Newman cited the growing adoption of artificial intelligence as a catalyst for Dell. “Dell continues to knock the lights out with AI revenue and profit growth, while solid execution all around continues,” he wrote. “Dell’s recent FQ4’26 AI server momentum ratcheted up a notch with all-time high quarterly revenues ($9B), orders ($34.1B) and backlog ($43B).” Newman now sees Dell as the clear leader for original equipment manufacturer market share in AI servers, even ahead of competitors. He noted that Dell’s AI server momentum remained “exceptionally strong” last quarter, citing broad-based demand while enterprise clients continue to grow. Newman added that Dell has already characterized enterprise as the fastest growing portion of its AI portfolio and pipeline. “Management highlighted record AI server orders of $34.1B and $9.5B of AI server shipments, exiting the quarter with a record $43B AI backlog. Dell expects $13B in AI server revenue for FQ1/27, which represents 37% growth MoM,” Newman wrote. “We believe the enterprise market will be even more lucrative for Dell as it picks up a larger portion of AI server revenue in coming years.” By fiscal year 2027, the analyst expects Dell’s AI server revenue to reach $50 billion. This would represent year-over-year growth of 100% and land above consensus. He also applauded Dell’s confidence in maintaining its AI margin for upcoming backlog and orders. “Despite tighter components across the ecosystem, Dell reiterated confidence in its ability to deliver its FY27 plan and maintain mid-single-digit AI operating margins, supported by backlog visibility, supply-chain scale, and differentiated deployment/services offerings,” Newman said.