Tuesday, Loop Capital Markets adjusted its outlook on Dell Technologies Inc (NYSE:DELL) shares, lowering the price target to $130 from the previous $185 while reaffirming a Buy rating. According to InvestingPro analysis, Dell appears undervalued at its current market price of $95.56, with the stock recently experiencing a significant 13.6% decline over the past week. The revision follows Dell’s January quarter earnings report released last Monday, where the company posted a revenue increase of 7% year-over-year to $23.9 billion, contributing to its impressive total revenue of $95.57 billion over the last twelve months. This growth was primarily attributed to the performance of its Infrastructure Solutions Group (ISG), which saw a 22% year-on-year jump in revenue to $11.4 billion. InvestingPro data shows Dell maintains a healthy P/E ratio of 15.09, suggesting reasonable valuation relative to its earnings potential.
The ISG’s significant revenue growth was led by its server and networking segment, which experienced a 37% increase to $6.6 billion, spurred by artificial intelligence (AI) and traditional server demand. Storage revenue also saw an uptick, rising by 5% compared to the same period last year, marking the second consecutive quarter of growth. AI was a notable contributor to the ISG’s success, with $2.1 billion in AI server shipments, $1.7 billion in AI orders, and a backlog worth $9 billion.
Dell’s Client Solutions Group (CSG) reported a modest year-over-year revenue growth of 1%, totaling $11.9 billion. This was driven by strong sales in the small and medium business sector, which helped to offset weaker commercial performance.
Looking forward, Dell anticipates the ISG will continue its robust growth trajectory, with expectations to expand in the high teens. For investors seeking deeper insights, InvestingPro offers 13 additional exclusive tips about Dell’s performance and reveals comprehensive analysis through its Pro Research Report, available as part of the subscription covering 1,400+ top US stocks. This growth forecast is supported by AI server shipments projected to reach at least $15 billion, alongside increases in traditional server and storage sectors. Storage is predicted to grow at a low single-digit rate. Additionally, the CSG is projected to grow in the mid-single digits, with the majority of this growth anticipated in the second half of fiscal year 2026 due to an expected refresh cycle.
In other recent news, Dell Technologies Inc. reported its fourth-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $2.68, compared to the forecasted $2.51. However, the company missed revenue expectations, reporting $23.9 billion against a forecast of $24.55 billion. UBS analyst David Vogt adjusted Dell’s stock price target to $150, down from $158, but maintained a Buy rating, noting first-quarter EPS guidance challenges. Mizuho Securities also lowered its price target for Dell from $150 to $140, maintaining an Outperform rating, citing a decline in AI Server orders and backlog reductions. Despite these challenges, Dell anticipates significant growth in AI server revenue, projecting $15 billion for fiscal year 2026. The company has introduced several AI-optimized platforms and new products, enhancing its competitive edge. Dell’s guidance for fiscal year 2026 estimates revenue between $101 billion and $105 billion, with EPS expected to reach $9.30.
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