"AI servers are selling out" Dell shares surge 33%

[Financial News]  
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Dell, the U.S. PC and AI server maker, surged 33% on the 29th local time.
The stock closed at $412.10, up $104.05, or 32.82%, on the day.
That came after the company’s quarterly results, released after the previous day’s market close, easily topped expectations on strong AI server demand, while its outlook was also upbeat.
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Dell said revenue for the first quarter of fiscal 2027, which ended on the 1st, surged 88% from a year earlier to $43.8 billion. AI server revenue alone soared 757% year on year to $16.1 billion. For the first time, it surpassed revenue from the traditional PC business, which came in at $14.6 billion.
Wall Street analysts had expected quarterly revenue of $35.5 billion, according to Yahoo Finance and CNBC.
Dell also said new AI orders during the first fiscal quarter reached $24.4 billion, and its backlog stood at $51.3 billion at the end of the quarter.
The company sharply raised its full-year revenue outlook for fiscal 2027 as well.
It now expects $167 billion in revenue, well above its previous forecast of $140 billion. That also far exceeds the market estimate of $142.1 billion. Dell said it expects $60 billion in AI server revenue alone this fiscal year.
In a note, Evercore ISI analyst Amit Daryanani said Dell’s strong results are giving shape to what the AI supercycle could look like.
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Wall Street analysts quickly raised their price targets for Dell.
Evercore’s Daryanani lifted his target from $270 to $450.
Citi analyst Asha Merchant kept her buy rating and sharply raised her target from $290 to $475.
Merchant said demand continues to outstrip supply, adding that a backlog is inevitable through year-end.
JPMorgan Chase analyst Samik Chatterjee raised his year-end price target for Dell from $280 to $500, while Loop Capital’s Ananda Baruah lifted his target to $550.
Baruah said, "The AI supercycle is now underway, including AI, CPU server, and memory demand."
dympna@fnnews.com Song Kyung-jae Reporter