Dell Technologies experienced a significant stock increase of 10% following RBC Capital Markets' initiation of coverage, which included an outperform rating and a price target of $640.
This rise is part of a broader trend, as Dell's shares have more than quadrupled in 2026, largely due to its strong position in the market for Nvidia-based servers and equipment, which are in high demand from cloud companies and enterprises for artificial intelligence applications.
RBC analyst David Paige noted that Dell is well-positioned to benefit from a multi-year AI infrastructure spending cycle, supported by a substantial $95 billion backlog in server orders. In its recent second-quarter earnings report, Dell exceeded expectations and raised its full-year sales forecast to $192 billion, indicating a nearly 70% increase from the previous year.
The company is also adjusting prices upward due to rising costs for components like memory. Dell's close relationship with Nvidia, highlighted by its early shipment of Nvidia's Grace Blackwell NVL72 racks, positions it favorably in the market. Additionally, demand for Dell's non-Nvidia products, such as storage solutions, has increased, with storage revenue rising 26% in the last quarter.
RBC emphasized that Dell's robust supply chain provides a competitive advantage, making it a reliable partner for customers during supply disruptions. Notably, former President Donald Trump has publicly endorsed Dell shares, further highlighting the company's visibility and potential in the market