Dell Stock Jumped 15% Last Week. Here's Why This Top AI Stock Is Still a Buy
Key Points
Dell makes the computer servers AI data centers need.
The company's earnings are skyrocketing.
- 10 stocks we like better than Dell Technologies ›
Shares of Dell (NYSE: DELL) rose nearly 15% this past week after the tech giant reported blistering sales and profit growth.
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AI-fueled gains
Dell's revenue surged 58% year over year to $47 billion in its fiscal 2027 second quarter, which ended on July 31.
The computer maker has emerged as a major beneficiary of the seemingly insatiable demand for artificial intelligence (AI) infrastructure. Sales of Dell's AI-optimized servers doubled to $16.4 billion.
As AI computing requirements shift from model training to agentic workloads, it's also boosting demand for central processor unit (CPU)-related infrastructure. Dell benefits here, too. Revenue in its traditional server and networking division rocketed 122% higher to $10.5 billion.
"IT environments have shifted from cost centers to value drivers that fuel growth and competitive advantage, and customers are investing accordingly -- creating opportunity across our portfolio," chief operating officer Jeff Clarke said.
Better still, Dell is becoming vastly more profitable as it expands its revenue base. Its adjusted operating and net income soared 160% and 189%, respectively, to $5.9 billion and $4.6 billion.
All told, Dell's adjusted earnings per share, boosted by stock buybacks, increased 203% to $7.04.
Management sees more gains ahead
These incredible results and encouraging ongoing sales trends prompted Dell to lift its full-year financial guidance. The AI leader now expects its revenue to rise by 69% to $192 billion and its adjusted earnings to jump 148% to $25.50 per share in fiscal 2027.
With its shares currently trading for about 20 times its projected profits, Dell's stock remains an attractive buy today.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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