Morgan Stanley Stays Underweight on DELL Despite Strong AI Server Momentum

Dell Technologies Inc. (NYSE:DELL) is one of the AI Stocks on the Market’s Radar. On November 26, Morgan Stanley raised its price target on the stock to $113.00 from $110.00 while maintaining an “Underweight” rating on the stock.

According to firm analysts, Dell’s strong AI server business is a standout accounting for more than 100% of the company’s fourth-quarter revenue guidance upside and the majority of EPS upside as compared to firm estimates and consensus.

AI server orders surged more than 150% during fiscal 2026 to $30B in orders so far this year. Analysts believe this momentum will continue in fiscal 2027, with AI server revenue likely to jump 50% in fiscal 2027 to total $37B.

However, the company still has to deal with with the memory supercycle, which is leading to price spikes and supply issues.

“AI servers are no longer the core of the debate on DELL – the impact of memory price inflation/supply shortages on demand and margins in FY27 (CY26) is. In our view, DELL properly contextualized how unprecedented this memory supercycle is, acknowledging its cost basis is going up for every product/that every product category will be impacted by memory inflation.”

Dell Technologies Inc. (NYSE:DELL) provides IT solutions, including servers, storage, networking, and personal computing devices, to businesses and consumers worldwide.

While we acknowledge the potential of DELL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.