A $735 Dell price target is no longer the number that matters. Dell Technologies closed Monday, 5 October 2026, at $552.29. That print already values the company’s own fiscal 2027 non-GAAP earnings guide of $25.50 at about 21.7 times. The bull case in this note is $663, or 26 times that guide. The base case is $561, or 22 times the guide, 1.6 percent above the close. The bear case is $408, or 16 times the guide, 26.1 percent under the close.
The street average of $579.36 is only 4.9 percent above Monday’s close, so the old $735 bull is no longer the interesting gap. What the average misses is cash conversion and backlog timing. Second-quarter GAAP net income was $4.133 billion. Free cash flow was $986 million. And roughly $53.5 billion of the $95 billion AI backlog is not required to deliver this year’s $74 billion AI-server revenue guide. The closes used here are Monday’s official prints.
Key facts
- Monday, 5 October 2026, Dell closed at $552.29, down $10.23, or 1.82 percent, from Friday’s $562.52 close. Source: StockAnalysis overview, read 6 October 2026, and the daily close series saved the same day.
- Fiscal second quarter, ended 31 July 2026 and reported 1 September 2026: revenue $46.971 billion, up 58 percent, GAAP diluted EPS $6.34, and non-GAAP diluted EPS $7.04. Source: Dell exhibit 99.1.
- Full-year fiscal 2027 guide, same exhibit: revenue $192.0 billion, up 69 percent, and non-GAAP diluted EPS $25.50, up 148 percent. AI-optimized server revenue guide: $74.0 billion, up 200 percent.
- Jeff Clarke, vice chairman and chief operating officer, said the AI server business booked $60.9 billion of orders, recognized $16.4 billion of revenue, and exited with a $95 billion backlog. Source: the 1 September 2026 exhibit.
- Free cash flow was $986 million in the quarter, down 47 percent, against GAAP net income of $4.133 billion. Adjusted free cash flow of $8.149 billion adds back $6.667 billion of financing receivables. Source: the same exhibit.
- S&P Global’s set, via StockAnalysis on 6 October 2026, data last checked 29 September 2026: average target $579.36, median $600, low $480, high $735, 29 analysts, consensus Buy.
- Erik Woodring at Morgan Stanley is a Hold at $511 as of 23 September 2026 on that page. Krish Sankar at TD Cowen is a Hold at $550, raised from $500, as of 29 September 2026.
- The board declared a $0.63 quarterly dividend on 1 September 2026, payable 30 October 2026 to holders of record on 20 October 2026. Source: the earnings exhibit.
What just happened, and why the obvious reading is wrong
The obvious reading is that a record quarter and a raised guide leave the stock below the average target, so the upside is the street. Monday’s close says the guide is already in the price. $552.29 divided by $25.50 is 21.7 times. The $579.36 average is 22.7 times that guide and 4.9 percent above the close. The $735 high is 28.8 times. The $480 low is 18.8 times.
The report week was a reversal, then a rerating. The 31 August close was $456.01. On 1 September the close was $425.00, down 6.8 percent, with a low of $421.89. On 2 September the close was $492.20, up 15.8 percent, on about 36.7 million shares. On 3 September the close was $516.39. The highest close in the saved daily series is $588.40 on 17 September. Monday is 6.1 percent under that close and 29.9 percent above the $425.00 report-day close.
From the 7 October 2025 close of $150.87, Monday is up 266 percent. The lowest close in the series is $111.07 on 20 January 2026. The overview page’s 52-week range, $110.22 to $595.51, is a different pair from those closes. Monday opened at $557.01, traded from $546.00 to $560.56, and closed on about 4.20 million shares, down from Friday’s $562.52.
Dell’s account on X wrote on 8 September 2026: “We’re thrilled to join the S&P 100 on Sept. 21 following a strong Q2 with record $47B in revenue, record EPS up >200%, and a record $95B AI backlog.” The 21 September close was $575.31, under the 17 September high close.
On the forecast page read 6 October 2026, Mehdi Hosseini at Susquehanna was a Buy at $700 on 12 September, David Paige at RBC Capital initiated at Buy and $640 on 10 September, and Katherine Murphy at Goldman Sachs was a Buy at $570 on 14 September. Erik Woodring at Morgan Stanley was a Hold at $511 on 23 September, 20.0 times the guide and 7.5 percent under the close. Krish Sankar at TD Cowen was a Hold at $550, from $500, on 29 September, 21.6 times the guide. September’s mix was 14 strong buy, 6 buy, and 9 hold.
@NGLSHMUELI wrote on X on 6 October 2026: “$DELL Mizuho maintains Buy on Dell and raises the price target to $650. The rating stays Buy. The target moves to $650 from $600.” The S&P average on the forecast page was still $579.36, with TD Cowen on 29 September still the latest named row. $650 would be 25.5 times the guide, and it stays out of the scenario table.
The bull case, with the maths
The bull case is $663. Twenty-six times the fiscal 2027 non-GAAP diluted EPS guide of $25.50 is $663 exactly. Against Monday’s $552.29 that is $110.71, or 20.0 percent. On the quote page’s 635.81 million shares outstanding, $663 is about $421.5 billion of market value. That share count times $552.29 matches the page’s $351.15 billion market cap. It is separate from the quarter’s 652 million diluted shares, and it only turns a price into a market value.
What has to be true is that Dell earns the $25.50 it has guided, and that buyers pay four turns more than the roughly 22 times already in Monday’s close. The reason for the extra turns is the backlog beyond this year’s AI revenue guide, with no fiscal 2028 EPS invented on top.
The bridge is arithmetic. First-half AI-optimized server revenue was $32.533 billion. The full-year AI guide is $74.0 billion, so the second half still has to produce about $41.5 billion of AI-server revenue. Clarke’s backlog was $95 billion. After that $41.5 billion, about $53.5 billion of the backlog is left for later years, before new orders and before cancellations. The street’s fiscal 2028 revenue average of $224.00 billion is $30.5 billion above its fiscal 2027 average of $193.51 billion, and $32 billion above the company’s $192 billion guide. The leftover backlog is larger than that step-up. The bull leaves it out of the EPS line. It only argues for 26 times a guide that is earned, instead of 22 times.
$663 sits under the S&P high of $735, at 28.8 times the guide. Susquehanna’s $700 is 27.5 times, and RBC’s live $640 initiation is 25.1 times. With the stock already within 5 percent of the street average, the interesting bull is the extra four turns.
The mix behind those turns is Infrastructure Solutions Group. Revenue was $31.782 billion, up 89 percent and about 68 percent of the company. AI-optimized servers were $16.401 billion, up 100 percent. Traditional servers and networking were $10.531 billion, up 122 percent. Storage was $4.850 billion, up 26 percent. ISG operating income was $4.781 billion, a 15.0 percent margin against 8.8 percent, and 81 percent of reportable segment operating income. Twenty-six times is an ISG multiple. Client revenue grew too, but it is not what 26 times is paying for.
Jeff Clarke, vice chairman and chief operating officer of Dell Technologies, said in the 1 September exhibit: “That’s clearest in our AI server business where we booked a record $60.9 billion in orders, recognized a record $16.4 billion in revenue and exited the quarter with a record $95 billion backlog.” Orders, recognized revenue, and backlog are three numbers. The bull uses the backlog as the reason for the multiple. It treats neither the $60.9 billion of orders nor the $95 billion backlog as revenue already earned.
The bear case, with the maths
The bear case is $408. Sixteen times the same $25.50 guide is $408 exactly, which is $144.29, or 26.1 percent, under Monday’s close. On the quote-page share count that is about $259.4 billion of market value.
What has to be true is that the guide is met and the multiple still falls by about a quarter, from 21.7 times to 16 times. The cause is cash, not a missed revenue print. GAAP net income in the quarter was $4.133 billion. Free cash flow was $986 million, which is 23.9 percent of that net income. A year earlier free cash flow was $1.868 billion. The change is minus 47 percent, in a quarter when revenue rose 58 percent and GAAP diluted EPS rose 273 percent.
The cash-flow tie-out is exact. Operating cash flow in the table was $2.225 billion, and the release summary rounds that to $2.2 billion. Capital expenditures and capitalized software, net, were $1.239 billion. The difference is the $986 million. Adjusted free cash flow was $8.149 billion, up 224 percent, of which $6.667 billion is the financing-receivables add-back, about 82 percent, and $496 million is equipment under operating leases. The footnote calls the receivables line the cash-flow impact of the change in financing receivables. From 30 January 2026 to 31 July 2026, cash went from $11.528 billion to $11.569 billion, accounts receivable from $17.585 billion to $22.918 billion, combined financing receivables from $14.280 billion to $20.430 billion, and inventories from $10.437 billion to $21.290 billion.
First-half free cash flow was $4.104 billion, against $4.096 billion a year earlier, a flat comparison in the table, while first-half GAAP net income was $7.571 billion. The growth rate in the bear is the street’s next year. Fiscal 2028 revenue of $224.00 billion is up 15.8 percent from the street’s fiscal 2027 average of $193.51 billion, and fiscal 2028 EPS of $29.12 is up 12.4 percent from $25.90. Sixteen times sits under the street low of $480. $408 is this note’s maths. It is under every named target on the five-row list because the multiple is the variable, and the guide is held constant.
Gross margin is the other lever. GAAP gross margin was 20.9 percent of revenue, against 18.3 percent. Non-GAAP gross margin was 21.1 percent, against 18.7 percent. GAAP operating margin was 11.5 percent, against 6.0 percent. Component cost can take that back. The Nvidia AI-server and memory-cost piece is the supplier side of the same squeeze. A quarter that hits $49 billion of revenue and gives up that gross margin is a path toward $408.
David Kennedy, chief financial officer of Dell Technologies, said in the exhibit: “In our second quarter, we delivered record revenue of $47 billion, record EPS and a record $4.3 billion returned to shareholders,” and that Dell was “raising our full-year FY27 revenue outlook by $25 billion to $192 billion, up nearly 70% year over year.” The guidance table prints 69 percent. The $4.3 billion is buybacks and dividends inside the quarter. The $0.63 was declared on 1 September, after the quarter. On 645 million basic weighted-average shares, $0.63 is about $406 million, which is a calculation, separate from that $4.3 billion.
What the tape and the filings actually show
All three cases use the $25.50 guide. The multiple is the only variable. Rolling the street’s 12.4 percent EPS growth onto the guide, and then picking a new multiple, is how a target drifts back toward a number already in print. On the guide Dell has given, Monday’s close is the base case.
| Case | Price | Versus Monday’s $552.29 | What has to be true |
|---|---|---|---|
| Bull | $663 | +20.0 percent | The $25.50 guide is earned and the market pays 26 times it for backlog beyond this year’s $74 billion AI guide. |
| Base | $561 | +1.6 percent | The guide is earned and the multiple stays at 22 times, which is where the tape already is. The stock is already this case. |
| Bear | $408 | -26.1 percent | The guide is met and the multiple falls to 16 times on weak cash conversion and a low-teens growth step next year. |
The base case market value, on the same 635.81 million shares, is about $356.7 billion. Twenty-two times $25.50 is $561 exactly. The street average of $579.36 is 22.4 times the street’s own fiscal 2027 EPS average of $25.90, and 19.9 times the fiscal 2028 EPS average of $29.12. Twenty times $29.12 is $582.40. That product is what the average is roughly saying: about 20 times a next-year EPS figure the company has not guided. It is not the base case here. The base case refuses the roll-forward.
The overview page shows a trailing price-to-earnings figure of 32.23 on EPS of $17.14, which matches Monday’s close, and a forward figure of 19.62. That 19.62 does not equal $552.29 divided by the $25.50 guide. The cases here use the guide.
| Item | Quarter ended 31 July 2026 | Quarter ended 1 August 2025 | Change |
|---|---|---|---|
| Revenue | $46.971 billion | $29.776 billion | +58 percent |
| GAAP diluted EPS | $6.34 | $1.70 | +273 percent |
| Non-GAAP diluted EPS | $7.04 | $2.32 | +203 percent |
| GAAP net income | $4.133 billion | $1.164 billion | +255 percent |
| Free cash flow | $986 million | $1.868 billion | -47 percent |
| Adjusted free cash flow | $8.149 billion | $2.518 billion | +224 percent |
| AI-optimized servers | $16.401 billion | $8.208 billion | +100 percent |
First-half revenue was $90.813 billion, so the $192.0 billion guide leaves about $101.2 billion for the second half. First-half non-GAAP EPS was $11.90. The third-quarter guide is $49.0 billion of revenue, up 81 percent, and non-GAAP diluted EPS of $6.50, which leaves about $52.2 billion of revenue and $7.10 of non-GAAP EPS as the fourth-quarter residual. GAAP diluted EPS for that quarter is guided at $6.10. Dell did not guide that quarter on its own line. Products revenue was $41.112 billion, up 72 percent, while services were flat at $5.859 billion. Basic and diluted weighted-average shares fell 5 percent, to 645 million and 652 million.
The same demand is priced elsewhere on its own maths. See the Nvidia price prediction, the Super Micro bull and bear case, and the Broadcom case. None of those prices is an input to $663 or $408.
What happens next
The record date is 20 October 2026, also the ex-dividend date on the overview, and the $0.63 is payable on 30 October. Four quarters at that rate are $2.52, a 0.46 percent yield on Monday’s close, matching the overview page. The dividend will not move the multiple. A stock still near $552 into the record date is the $561 base: the guide is the anchor, and the argument is the multiple.
The fiscal third-quarter guide is revenue of $49.0 billion, up 81 percent, and non-GAAP diluted EPS of $6.50. That quarter has to carry a large piece of the $41.5 billion of AI-server revenue still required for the $74 billion full-year AI guide. Landing on $49 billion and $6.50, with gross margin near the second quarter’s 20.9 percent GAAP and 21.1 percent non-GAAP, is the $561 base. A print that hits the revenue guide and gives up gross margin, while inventories of $21.290 billion and financing receivables of $20.430 billion keep climbing, is the path toward $408. The exhibit’s forward-looking statement names supplier concentration, AI demand, and the financing book among the risks.
The StockAnalysis overview lists an estimated earnings date of 24 November 2026. That is the page’s estimate on 6 October 2026, and the exhibit does not publish it. Confirming $6.50 keeps the stock on the $561 base. The bull still needs buyers to pay 26 times. The bear is 16 times if cash conversion and a slower fiscal 2028 are the story by then.
This is not financial advice.
Frequently asked questions
What is the Dell stock prediction in this note?
Bull $663, base $561, bear $408. Those are 26, 22, and 16 times Dell’s fiscal 2027 non-GAAP EPS guide of $25.50. The spot is the Monday, 5 October 2026, close of $552.29, and the base case is 1.6 percent above it.
Why is the bull case not $735?
$735 is still the high in the S&P set, at 28.8 times the guide. Monday’s close is already within 4.9 percent of the $579.36 average, so the old high is no longer the interesting gap. $663 is 26 times the guide the company has published.
What did Dell guide for fiscal 2027?
The 1 September 2026 exhibit guides revenue of $192.0 billion, up 69 percent from a prior guide of $167.0 billion, AI-optimized server revenue of $74.0 billion, GAAP diluted EPS of $24.37, and non-GAAP diluted EPS of $25.50. The third-quarter line is $49.0 billion of revenue and non-GAAP diluted EPS of $6.50. The street’s fiscal 2027 EPS average is $25.90, and the low of that range is the company’s $25.50.
Why is the bear case below the street low?
The street low is $480, or 18.8 times the guide. $408 is 16 times the same guide, assumed earned, because free cash flow was $986 million against $4.133 billion of GAAP net income and because street fiscal 2028 EPS growth is about 12 percent. It is not a published street target.
How should the $95 billion backlog be read?
Clarke separates $60.9 billion of AI-server orders, $16.4 billion of AI-server revenue, and a $95 billion backlog. First-half AI-server revenue was $32.533 billion, so the $74 billion full-year AI guide still needs about $41.5 billion. The backlog above that remainder is a later-year timing item if it converts. It is outside the $25.50 used here.
What is the next dated checkpoint?
The $0.63 dividend has a record date of 20 October 2026 and a payable date of 30 October 2026. The operating test is the third-quarter guide of $49.0 billion and $6.50. StockAnalysis estimates the report on 24 November 2026, which is the page’s estimate. Hitting that guide supports $561, and $663 still requires a higher multiple.