Dell Stock Forecast: Earnings Beat Expectations, AI Server Orders Surge, DELL Stock Could Rise to $600

TradingKey - After the market close on September 1 ET, Dell Technologies (DELL) reported its fiscal second-quarter 2027 financial results, with the latest report once again showing rapid growth in AI server demand. Dell's stock fell 4.44% on the day to close at $435.76, marking a third consecutive trading day of losses. However, after the better-than-expected earnings release, the stock surged over 8% in after-hours trading, indicating a recovery in bullish market confidence and suggesting the stock may continue its prior upward trend.

Why Dell Stock Is Rising: Record AI Server Orders Prompt Sharply Raised Full-Year Outlook

The core reason for the after-hours gain in Dell's stock price was that its latest earnings results far exceeded expectations.

According to the latest earnings report, Dell's second-quarter results significantly beat market expectations. Quarterly revenue reached a record $47 billion, up 58% year-over-year, surpassing the market's previous estimate of around $44.9 billion; adjusted EPS reached $7.04, up 203% year-over-year, also well above market expectations of $4.91. Following the report's release, DELL's after-hours stock price rose over 8%, reflecting investors' positive response to the performance.

AI servers remained the most important growth engine this quarter. Dell secured a record $60.9 billion in AI server orders in the second quarter, with AI server revenue reaching $16.4 billion, up 100% year-over-year. The AI server backlog at the end of the quarter rose further to $95 billion, a substantial increase from $51.3 billion in the previous quarter. Over the past 12 months, the company's AI server orders have exceeded $130 billion.

Meanwhile, traditional server and networking revenue grew 122% year-over-year to $10.5 billion, and storage business revenue rose 26% to $4.9 billion; revenue for the Client Solutions Group, which includes the PC business, reached $15 billion, up 20% year-over-year.

More importantly, the company once again significantly raised its guidance. Dell raised its fiscal 2027 revenue forecast from the previous $167 billion to $192 billion, and increased its adjusted EPS guidance from $17.90 to $25.50; the full-year AI server revenue forecast was also raised from about $60 billion to $74 billion. For the third quarter, the company expects revenue of approximately $49 billion and adjusted EPS of approximately $6.50, both well above prior market expectations.

Overall, the earnings report presents a clear positive for Dell's stock price: $60.9 billion in new orders reinforces demand, a $95 billion backlog increases future revenue certainty, and substantial upward revisions to full-year revenue and EPS directly improve profitability expectations. The biggest short-term variable is profit margins—if Dell can continue to improve profitability alongside rapid future AI server growth, its stock price could gain further valuation support.

Dell Stock Technical Analysis

Dell stock daily chart, Source: TradingView

Based on Dell's daily stock chart, recent performance has shown notable weakness, with the stock falling for three consecutive trading days and breaking below both its 10-day and 20-day moving averages. On Tuesday, it even breached its August 24 low of $424, significantly boosting short-term bearish momentum. However, following the earnings release, the stock surged over 8% in post-market trading, substantially restoring market bullish sentiment.

Currently, if the stock's opening today extends Tuesday's post-market performance, it will test short-term resistance near $475 on the upside. A breakout above this level would see the stock further test its all-time high of $514, and a continued rise could open the door for a test of the $600 mark.

On the downside, initial support below is near $420, with the $400 mark further down. If this level fails to hold, the stock could pull back further toward around $360.