Evercore ISI Keeps Dell as Top Pick, Reiterates $575 Target on AI Growth

Evercore ISI has removed Dell Technologies from its Tactical Outperform (TAP) roster in a new research note after the company’s substantial better-than-expected July quarter and raised guidance. The firm nevertheless reiterated its constructive long-term view, retaining Dell among its Top Picks with an Outperform rating and a $575 price objective.

The stock advanced about 7% in intraday trading after Dell posted July-quarter revenue of $47 billion and earnings per share of $7.04, comfortably exceeding consensus forecasts of $44.9 billion and $4.91.

Total sales climbed 58% year over year, with increases widespread: conventional server and networking revenue jumped 122%, AI server sales grew 100%, storage revenue rose 26%, and client solutions (PCs) advanced 20%.

Evercore ISI noted the numbers confirm that expansion is now supported not only by neocloud artificial-intelligence compute demand but also by a growing amount of enterprise spending on both conventional and AI-based installations.

AI server revenue reached $16.4 billion, and AI server orders amounted to $61 billion, lifting the AI backlog to near $95 billion and offering enhanced forward visibility into Dell’s growth path.

The firm attributed traditional server strength to clients shifting to next-generation x86 systems (Gen 17/18), coupled with upgrades to storage infrastructure and demand for on-premises inference and token-generation environments.

The 26% storage increase also aided margin improvement, helping lift the Infrastructure Solutions Group's margin to 15%, a 630-basis-point gain from the prior year.

For fiscal 2027, Dell lifted its revenue outlook to roughly $192 billion, implying 70% annual growth (ISG up 120%, AI up 300%, and CSG growing in the mid-teens). The company also set a non-GAAP earnings target of about $25.50 per share, compared with the earlier estimate of $17.90.

Evercore ISI pointed out that even with the robust performance, Dell still faces supply constraints — a dynamic the broker considers favorable for continued revenue growth through fiscal 2028 and later.

Evercore described the July 1 earnings release as the trigger for the tactical-list adjustment, while standing by its Outperform rating and $575 price objective, citing Dell’s wide-ranging presence in appealing infrastructure sectors.

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