Dell nearly doubles revenue growth target as AI demand surges

Dell Technologies dramatically raised its long-term financial outlook on Monday, nearly doubling its annual revenue growth target to 7-9% from 3-4% and boosting its adjusted earnings per share growth target to 15% from 8%, as surging demand for artificial intelligence servers transforms the company from a traditional PC maker into a critical enabler of the AI revolution. The technology giant's stock surged approximately 6% in premarket trading following the announcement at its Securities Analyst Meeting in New York, with shares reaching around $155 before settling to more modest gains later in the day. The aggressive revision reflects what CEO Michael Dell described as "insatiable demand" for AI infrastructure, with customers "hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale". AI Server Boom Drives Record Growth Dell's Infrastructure Solutions Group, which includes servers and storage systems, has experienced unprecedented growth as enterprises race to deploy generative AI capabilities. The company shipped $8.2 billion worth of AI servers in its most recent quarter and booked $5.6 billion in new AI server orders. Dell now projects AI-related revenue will reach $20 billion in fiscal 2026, representing a doubling from previous expectations. "We're actively driving the changes that are shaping the future of AI infrastructure as evidenced by growing AI into a $20 billion business in two years," said Jeff Clarke, Dell's vice chairman and chief operating officer. The company's AI server shipments have grown sequentially every quarter since launching its AI-optimized systems, with both large enterprises and smaller organizations embracing Dell's comprehensive infrastructure solutions Investor Confidence and Market Position Wall Street analysts have responded positively to Dell's enhanced outlook, with several firms reiterating buy ratings. BofA Securities projects Dell's AI server business could add $65 billion in sales over five years, driving approximately 12% annual revenue growth. Raymond James maintained its Outperform rating with a $152 price target, noting the significant upside potential despite Dell's conservative valuation of roughly 0.8 times forward sales compared to 7 times for the broader tech sector. The company has committed to returning over 80% of adjusted free cash flow to shareholders through dividends and buybacks, while extending its pledge to raise quarterly dividends by at least 10% annually through fiscal 2030. Dell has returned $14.5 billion to shareholders since fiscal 2023, demonstrating its disciplined capital allocation strategy amid the AI infrastructure boom