Evercore ISI added Dell Technologies (NYSE:DELL) to its TAP Outperform List on Thursday as investors await the company’s January quarter report due February 26. The stock, trading at $116.78, is judged by InvestingPro Fair Value estimates to be undervalued, with analyst price targets spanning a wide range from $101 to $200.
The research firm expects Dell to post revenue and earnings per share that top current consensus forecasts of $31.4 billion and $3.52, respectively. Evercore pointed to robust near-term demand across traditional hardware categories - including personal computers and servers - as well as strength in AI compute workloads as the rationale behind its more optimistic outlook.
Those expectations are consistent with recent company performance metrics. Dell recorded 10.79% revenue growth over the last twelve months, and sell-side analysts are projecting 17% revenue growth for fiscal 2026. At the end of its fiscal third quarter, Dell reported $12.3 billion in AI-specific orders and an $18.4 billion backlog, and it reiterated guidance for $25 billion in AI server revenue for fiscal 2026. Early data from IDC included in the firm’s review indicates Dell gained roughly 100 basis points of market share in the fourth quarter - its first share gain in over three years.
Valuation metrics cited in the research highlight a P/E ratio of 15.38, and InvestingPro labels Dell a "prominent player in the Technology Hardware, Storage & Peripherals industry," suggesting its multiple appears attractive relative to the forecasted growth trajectory.
On the margin side, consensus expects a sequential gross margin decline of about 90 basis points to 20.2% for the January quarter, with early memory cost headwinds identified as a contributing factor. Management has responded by adopting more dynamic pricing strategies and shortening quote windows in an effort to defend margins. InvestingPro data shows Dell’s gross profit margin for the last twelve months at 20.95%, a figure the service characterizes as evidence the company "suffers from weak gross profit margins."
Evercore maintained its Outperform rating but trimmed its price target to $160 from a prior level. The firm indicated it expects Dell’s management to present a plan targeting at least high single-digit topline growth and low-to-mid teens EPS growth for fiscal 2027. With the company’s quarterly report scheduled in seven days, analysts are modeling fiscal 2026 EPS of $10.27.
Other recent analyst actions reflect continued interest in Dell’s positioning around AI infrastructure. Barclays upgraded the stock to Overweight and set a $148 price target, citing substantial AI server orders and steady operating margins. Separately, Goldman Sachs initiated coverage with a Buy rating and a $165 price target, although that target is lower than a previously published $185 figure. These adjustments signal analyst confidence in Dell’s market placement even as questions about margin durability persist.
Supply-chain dynamics are also an active part of the story. Dell and other PC makers such as HP, Acer and Asus are reportedly weighing purchases of memory chips from Chinese suppliers amid a global shortage. The scarcity has impacted availability of DRAM and NAND components, which are essential across a range of electronic devices. Lenovo’s recent cautionary note on a potential year-long memory crunch and reports of memory costs climbing between 40% and 50% last quarter underscore the scale of the disruption. For investors, these developments are material to expectations for hardware margins and inventory costs across the technology and consumer electronics sectors.
Investors seeking deeper analysis can consult the comprehensive Pro Research Report covering Dell and more than 1,400 other US equities available through InvestingPro.
Key points
- Evercore ISI added Dell to its TAP Outperform List ahead of the January quarter earnings, forecasting revenue and EPS above consensus and citing strong demand in PCs, servers and AI compute.
- Dell reported 10.79% revenue growth over the past twelve months, holds $12.3 billion in AI orders and $18.4 billion of backlog, and is guiding $25 billion in AI server revenue for fiscal 2026.
- Analysts and data platforms show Dell’s valuation and P/E of 15.38 as attractive versus expected growth, while several firms including Barclays and Goldman Sachs have recently revised ratings and price targets.
Risks and uncertainties
- Gross margin pressure - Consensus expects a roughly 90 basis point sequential decline to 20.2% for the January quarter, driven in part by early memory cost headwinds, which could weigh on profitability across the technology hardware sector.
- Memory supply constraints - A global shortage of DRAM and NAND chips and rising memory prices, reported to have increased by 40%-50% last quarter, pose execution and cost risks for PC and server manufacturers.
- Valuation dispersion - Analyst price targets for Dell vary widely from $101 to $200, reflecting uncertainty around the company’s near-term trajectory and market expectations in hardware and AI infrastructure markets.