Dell Shares Jump 10% As RBC Sees AI Infrastructure Boom Driving Further Gains

Dell Technologies shares jumped 10% on Friday after RBC Capital Markets initiated coverage of the computer maker with an "outperform" rating and a $640 price target, adding to a remarkable rally that has lifted the stock more than fourfold in 2026.

The surge reflects a sharp change in how investors view Dell. Once primarily known as a PC manufacturer, the company has become an important supplier of the infrastructure required to build and operate artificial intelligence systems, positioning it to benefit from what RBC sees as a multi-year cycle of AI investment.

"With no signs of slowing, we believe DELL continues to be well positioned to benefit from a multi-year AI infrastructure spending cycle," RBC analyst David Paige wrote in a note Thursday.

Dell's exposure to the AI buildout is visible in its order book. RBC said the company has about $95 billion in server orders that have yet to be fulfilled, while Dell sold roughly $16.4 billion of AI servers in its second quarter.

The scale of that backlog gives investors a clearer view of why Dell's growth story has moved well beyond traditional PCs. Cloud providers and enterprises are spending heavily on computing infrastructure to support demanding AI workloads, creating an opportunity for server manufacturers capable of securing the necessary chips, components and other equipment.

Dell is benefiting particularly from its relationship with Nvidia, whose GPUs have become central to the expansion of AI data centers.

The company was among the first manufacturers to ship Nvidia's Grace Blackwell NVL72 systems, highlighting its access to Nvidia's processors and its ability to assemble and deliver high-end AI infrastructure at scale. Dell also supplies neocloud companies such as CoreWeave, which are building large AI computing environments for customers.

Dell's backlog points to continued AI spending, and its latest financial results have reinforced the shift.

The company reported second-quarter earnings earlier this month that exceeded analysts' expectations and raised its fiscal full-year revenue forecast to $192 billion. That would represent an increase of nearly 70% from the previous year.

The higher forecast comes even as Dell faces rising costs for components, particularly memory. Executives told investors during the earnings call that the company was increasing prices to offset those higher input costs.

For investors, the combination of strong demand and rising component costs creates an important test for Dell's AI infrastructure business. The company needs to convert its substantial backlog into revenue while managing supply constraints and protecting margins as demand for AI hardware pushes up the cost of critical components.

RBC argues that Dell's supply chain gives it an advantage in that environment.

"Dell's best-in-class supply chain represents a competitive moat that differentiates the company during periods of supply disruption," Paige wrote, adding that customers are increasingly turning to Dell for a "calming hand" when supply and capacity are constrained.

That advantage could become more valuable as AI infrastructure spending expands beyond GPUs.

Dell's AI opportunity is not limited to servers containing Nvidia chips. Its storage business is also benefiting from the growth of AI workloads, with storage revenue increasing 26% in the latest quarter.

AI systems require substantial amounts of data to be stored, moved and accessed, meaning demand can extend across the broader infrastructure stack rather than being concentrated exclusively in accelerators and servers. RBC sees this breadth as another reason Dell can benefit as companies build out AI capacity.

The company can effectively offer customers a broad range of equipment needed to establish AI infrastructure, rather than forcing them to assemble systems from multiple suppliers. That positioning has helped transform Dell's investment narrative. The company is no longer simply participating in the PC market; it is becoming part of the physical infrastructure behind the AI boom.

The challenge for investors is valuation and expectations after such a dramatic stock-market run. Dell shares have already more than quadrupled this year, meaning continued gains will require the company's AI business to deliver substantial growth rather than merely benefit from the initial wave of enthusiasm.

The $95 billion server backlog provides considerable visibility, but converting that backlog into revenue will depend on Dell's ability to secure components, manage costs and deliver systems as customers continue expanding their AI infrastructure.

For now, RBC's initiation indicates Wall Street believes the spending cycle still has room to run.

Dell's close relationship with Nvidia, access to high-end GPUs, growing storage demand and large pipeline of unfilled server orders have turned the company into one of the clearest beneficiaries of the AI infrastructure boom.

President Donald Trump has also publicly recommended Dell computers, and the source material notes that he has bought Dell shares since returning to office last year. In July, Trump again recommended buying Dell computers, adding another high-profile endorsement to a stock that has already become one of the year's biggest technology-market winners.