Dell Stock Surges 22% After Forecasting AI Server Revenue Will Double to $50 Billion
While the rest of the market was having a rough day, Dell Technologies was having its best single-day performance in two years. Shares surged 22% to $148.24 on Friday after the company projected AI server revenue would more than double to $50 billion by fiscal 2027 — a forecast that silenced growing skepticism about the sustainability of enterprise AI spending.
The Numbers
Dell's fourth quarter delivered record revenue of $33.4 billion. The company set a fiscal 2027 revenue target of $138 billion to $142 billion, with adjusted earnings per share of $12.90. But the headline number was the AI server forecast: revenue from AI-optimized servers — those designed for training and running AI models — will more than double, representing 103% growth year-over-year.
To sweeten the deal for shareholders, Dell announced a 20% dividend increase along with $10 billion earmarked for stock buybacks.
Pricing Power in a Tight Market
Dell COO Jeff Clarke explained on the earnings call that initial "sticker shock" among customers gave way as they "quickly grasped the supply constraints." Customers are racing to secure parts, especially DRAM memory chips that are getting increasingly scarce and expensive. Dell raised server prices on December 10 and PC prices on January 6 — and customers kept buying.
The company now serves more than 4,000 AI server customers, including Elon Musk's AI startup xAI and cloud infrastructure company CoreWeave.
Against the Market
Dell's surge was especially notable given the broader market backdrop. The Dow dropped 1.2%, the S&P 500 lost 0.7%, and the Nasdaq shed 1% on the same day, as traders worried about inflation and questioned the real value of AI investments. At least seven Wall Street brokerages raised their price targets on Dell, with JPMorgan expecting a further rally to $165.
The Bottom Line
The AI infrastructure boom isn't slowing down — it's accelerating. Dell's 22% single-day surge is proof that enterprise demand for AI servers is real, not speculative. When a company can raise prices twice in two months and still see demand accelerate, that tells you everything about where the market is headed. The only risk? A global memory shortage that could cap how fast Dell can actually deliver.