Dell Technologies Sees Strong AI Server Growth, Shares Surge 17.5%

February 27, 2026

Shares of Dell Technologies jumped 17.5% to a three-month high of $142.31 on Friday, its biggest one-day gain in nearly two years. The company's upbeat forecast for its artificial intelligence (AI) server business has fueled investor optimism.

AI Server Revenue Projections

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Dell expects AI server revenue to grow 103% to approximately $50 billion in fiscal 2027, driven by strong demand for AI infrastructure. This growth is part of a broader trend in the data center equipment market, where industry leaders are projected to invest at least $630 billion this year in expanding AI capabilities.

Shareholder Returns Boost Sentiment

Dell's announcement of a 20% increase in cash dividends and an additional $10 billion share repurchase program has boosted investor sentiment. At least seven Wall Street brokerages have raised their price targets on the stock, with JPMorgan Chase analysts expecting Dell shares to rally at least 36% over the next year, setting a target of $165.

AI Leadership and Challenges

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Dell's leadership in AI compute for Tier 2 cloud providers and enterprises gives it flexibility in managing margins and earnings. However, the company's traditional PC manufacturing division faces challenges from rising memory chip costs, which could affect its gaming PC business.

Market Research and Outlook

Market research firm TrendForce has revised its first-quarter 2026 forecast for Dynamic Random Access Memory (DRAM) price growth to 90%–95%, up from earlier estimates. Despite cost pressures, Dell has outperformed rivals such as HP Inc. and Lenovo Group over the past year, reflecting investor confidence in its AI-driven growth strategy.