Evercore ISI Affirms Dell as Top Pick With $575 Target on AI Growth

Evercore ISI has reaffirmed its "Outperform" rating and $575 price target for Dell Technologies (DELL), keeping the company as one of its Top Picks. The move comes after Dell reported significantly better-than-expected quarterly results and raised its full-year guidance, prompting the investment firm to re-evaluate its position, according to a recent analyst note.

While Dell was removed from Evercore ISI's short-term "Tactical Outperform" list following the strong performance, the firm's long-term conviction remains high, anchored by powerful growth in artificial intelligence infrastructure.

A Decisive Earnings Beat

Dell's results for the quarter ending in July decisively surpassed market expectations, validating the firm's bullish thesis. The company's performance highlighted broad-based strength across its business segments.

• Revenue: $47 billion, beating the consensus estimate of $44.9 billion.
• Earnings Per Share (EPS): $7.04, well ahead of the anticipated $4.91.
• Overall Revenue Growth: 58% year-over-year.
• Segment Growth: Traditional Server/Networking surged 122%, AI servers grew 100%, Storage rose 26%, and the Client Solutions Group (CSG) saw a 20% gain.

AI Backlog Signals Future Growth

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Demand for AI-related hardware was a key driver of the quarter's success. Evercore ISI noted that growth is stemming not just from cloud providers but increasingly from enterprise customers deploying both traditional and AI systems. AI server revenue reached $16.4 billion, while new orders for AI servers hit $61 billion.

This surge in orders has pushed Dell's AI backlog to approximately $95 billion, providing investors with greater visibility into the company's growth trajectory. Analysts also pointed to upgrades in traditional server and storage infrastructure as significant contributors. This strength helped expand the Infrastructure Solutions Group (ISG) margin to 15%, a year-over-year increase of 630 basis points.

Updated Guidance and Analyst View

In light of its strong performance, Dell raised its financial outlook for its 2027 fiscal year. The company now projects revenue of approximately $192 billion and non-GAAP EPS of around $25.50, a substantial increase from its prior estimate of $17.90.

Evercore ISI noted that Dell remains supply-constrained, a factor that could support sustained revenue growth into fiscal 2028. The firm characterized its tactical list change as a response to the recent stock run-up, while its fundamental long-term view remains positive due to Dell's exposure to high-demand infrastructure markets.