Every so often a stock stops being the thing investors thought it was.
For most of the past decade, Dell Technologies (DELL) was a name people owned without thinking about it much. It sold laptops to school districts and servers to mid-sized banks, threw off cash, and traded at the multiple the market reserves for companies it expects to grow slowly and predictably forever.
That reputation was fair. Dell went private in 2013, returned to public markets in 2018, and spent years getting described as a hardware business in a software world.
Then artificial intelligence (AI) showed up, and the unglamorous part of Dell’s business turned out to be the part that mattered. Somebody has to build the machines that run the models, wire them, cool them and service them.
Wall Street has been marking that discovery up in real time. The stock has roughly quadrupled over the past year, and analyst notes have spent most of it chasing the price rather than leading it.
Which brings us to Wednesday, Sept. 9, when Evercore ISI lifted its price target on Dell to $650 from $575 and kept an outperform rating, according to CNBC.
That is a large number. It is also the least interesting number in the note.
Why Dell’s AI server backlog changed the story
For the target to makes sense, you need to understand the backlog.
Dell reported fiscal second quarter results on Sept. 1 that broke the model most investors were carrying into the print. Revenue landed at $47 billion, up 58% from a year earlier, and adjusted earnings per share hit $7.04, up 203%, according to a company statement.
The figure that actually moved the stock was not revenue. Dell booked $60.9 billion in AI server orders during the quarter and finished it with a $95 billion AI backlog, “the most in our history,” said operating chief Jeff Clarke, according to a company statement.
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Three months earlier that backlog sat at $51.3 billion. Dell also raised full-year guidance for the second time this fiscal year, to roughly $192 billion in revenue and $25.50 in adjusted earnings per share.
Morgan Stanley, Goldman Sachs and Citigroup all lifted their price targets after the report, reported MarketWatch.
What makes the backlog unusual is that it is not purely a demand signal. Dell has been supply constrained on memory, flash and processors, which means some of that $95 billion reflects orders the company physically could not fill in the quarter.
That cuts both ways for shareholders. Constraint protects pricing and pushes revenue into future quarters, but it also means the conversion timetable belongs partly to Dell’s suppliers rather than to Dell.
What Evercore’s new Dell price target actually says
The Evercore argument is not that the AI trade is early. It is that Dell’s next leg comes from somewhere other than raw server volume.
Analyst Amit Daryanani tied the next phase of appreciation to enterprise AI adoption, higher-margin attach and continued operating expense leverage. Then he added the line most of Wednesday’s coverage skipped past, writing that the firm was maintaining its rating and raising its target to $650, “with upside at $1,000,” according to CNBC.
Here is the context in a few numbers:
- Dell’s AI backlog stood at $95 billion at quarter end, against roughly $74 billion in AI server revenue guided for the entire fiscal year, according to a company statement.
- Full-year adjusted earnings per share guidance went to $25.50 from $17.90, according to a company statement.
- Shares closed Wednesday at $535.25 after touching an intraday high of $562.99, according to StockAnalysis.com.
That last line is the one I keep going back to. The stock printed a fresh 52-week high on the upgrade and then handed almost all of it back, closing up 0.26%.
From Wednesday’s close, the $650 target implies about 21% upside. The $1,000 figure implies roughly 87%.
Running the math behind the $1,000 case
I ran the numbers against Dell’s own guidance, and the bull case turns out to be arithmetic rather than enthusiasm.
At $650, Dell would trade near 25 times the $25.50 in adjusted earnings the company has guided to for this fiscal year. That is a full-market multiple for a hardware maker, though not an absurd one at this growth rate.
Get to $1,000 on that same multiple and you need something close to $40 in earnings per share. Dell earned $10.30 on an adjusted basis across all of fiscal 2026.
Related: Analyst resets Dell stock price target after earnings
So the bull case is not asking whether Dell beats this quarter. It is asking whether Dell can roughly quadruple fiscal 2026 earnings inside about two years and hold a premium multiple the whole way.
My analysis keeps landing on one variable: how much of that $95 billion backlog converts, and at what margin. Dell has said AI server profitability is tracking to a mid-single-digit operating margin, well under what the company earns on storage and commercial PCs.
Backlog tells you the revenue is coming. It tells you almost nothing about what falls to the bottom line.
That distinction is why the same $95 billion can support a $650 target and a $1,000 target at the same time without either being dishonest. One assumes Dell ships the backlog. The other assumes Dell ships it and earns more on each unit than it does today.
What Dell investors should watch next
Wednesday’s intraday reversal matters because it shows where the marginal buyer sits.
A $650 target on a $535 stock is a bet that the backlog converts. A $1,000 target is a bet that the mix improves while it converts, which is a different and considerably harder claim.
Dell has at least given investors a checkable schedule for finding out. Third quarter guidance calls for about $49 billion in revenue and $6.50 in adjusted earnings per share, with results due in late November.
Watch gross margin and the storage line rather than the headline revenue figure. Storage carries the margin profile that makes the high case work, and it grew 26% last quarter off a small base.
If margin follows the backlog, the case for the high target gets easier to make. If it does not, $650 stops looking like a waypoint and starts looking like the ceiling.
For anyone holding Dell after a year like this one, that is the more useful question than whether an analyst moved a number on a Wednesday morning. The target tells you what one firm thinks. Gross margin tells you whether the company can earn it.
Related: Dell Technologies Inc. Q2 2027 Earnings: Recap of $DELL Earnings Call, Forecast