Dell (DELL) Stock Surges as Analyst Ups Target on Soaring AI Infrastructure Demand

Key Takeaways

• Mizuho Securities upgraded Dell’s price objective to $215 from $180, maintaining its Outperform designation.
• Projected market share for Dell in AI servers is expected to climb from 19% in 2025 to 25% by the end of 2029.
• Super Micro (SMCI) saw its target reduced to $25 from $33, primarily due to regulatory challenges rather than demand concerns.
• Cloud service providers are expected to spend $689 billion in capex during 2026, representing a 64% increase from the previous year.
• The AI server market is anticipated to reach $862 billion by 2029, with a compound annual growth rate of 44% starting from 2024.

Mizuho Securities opened the trading week with an optimistic assessment of Dell, increasing its price objective to $215 from a previous $180 target while maintaining its Outperform rating. This revision signals strengthening confidence that Dell stands ready to secure an expanding portion of the rapidly growing AI server marketplace.

Dell Technologies Inc., DELL

Analyst Vijay Rakesh from Mizuho highlighted increasing capital investments from leading technology giants as a primary catalyst. Anticipated capital expenditure from cloud service providers reaches $689 billion for 2026, marking a 64% annual increase, with projections for 2027 consensus climbing to $811 billion.

Dell appears positioned as a major winner from this investment surge. The company’s AI server backlog currently stands at approximately $85 billion spanning five quarters, with Mizuho’s updated forecasts estimating AI server orders reaching $53 billion during fiscal 2027 and $68 billion in fiscal 2028 — revised upward from earlier projections of $50 billion and $61 billion respectively.

Shares have advanced 39% year-to-date and soared 148% over the trailing twelve months, currently trading at a price-to-earnings ratio of 20 and a PEG ratio of 0.53, which Mizuho considers appealing given the anticipated growth trajectory.

Explosive Growth in AI Infrastructure Market

Mizuho elevated its 2029 AI server shipment projection to 5.67 million units, up significantly from its earlier estimate of 3.67 million units. Total spending on AI servers is forecasted to hit $862 billion by 2029, compared to approximately $140 billion in 2024 — representing a remarkable 44% compound annual growth rate.

Demand extends beyond hyperscale operators. Smaller cloud service providers, corporate enterprises, and government-sponsored data centers are all anticipated to expand their server infrastructure as agentic artificial intelligence applications proliferate. Rakesh observed that “all key customers indicate continued willingness to stand up additional AI server clusters.”

Dell’s competitive position in AI servers is forecast to strengthen from 19% market share in 2025 to 25% by 2029, capturing territory from Super Micro and Taiwan-based manufacturers such as Foxconn and Quanta Computer.

Evercore ISI independently increased its Dell price target to $205, also sustaining an Outperform rating, pointing to sustained strength in CPU-based server demand.

Regulatory Issues Weigh on Super Micro

Super Micro faced contrasting circumstances. Mizuho retained its Neutral stance on SMCI and lowered its price target to $25 from $33 — though the reduction stems from legal complications rather than deteriorating AI server market conditions.

Federal authorities filed charges against a Super Micro co-founder and two additional individuals for allegedly redirecting servers to China in violation of export restriction regulations. Super Micro as a corporate entity was not included as a defendant. SMCI shares have declined 21% year-to-date, currently trading near $23.31.

Rakesh acknowledged that immediate legal uncertainties might redirect certain orders toward Dell, but emphasized that Super Micro’s extended-term prospects remain solid considering the robust momentum in AI infrastructure investments.

SMCI increased 0.4% during premarket trading on Monday, while DELL advanced 2.95%.