Dell Technologies shares climbed more than 11% on Wednesday after RBC Capital Markets began coverage of the company with an Outperform rating and a price target of $640.
RBC analyst David Paige wrote that Dell “continues to be well positioned to benefit from a multi-year AI infrastructure spending cycle.” He described the company’s supply chain as a competitive moat that offers customers a “calming hand” during periods of supply volatility.
The move extends an already strong run for the stock, which has gained over 300% in 2026. Dell has become one of the largest vendors of Nvidia-based servers and related equipment, drawing demand for AI infrastructure from cloud companies and enterprises.
Dell holds a record $95 billion in server orders in its backlog that remain unfulfilled. The company recognized $16.4 billion of AI server revenue in its second quarter.
At the start of September, Dell reported better-than-expected second-quarter results and lifted its full-year revenue outlook by $25 billion to $192 billion, a figure that would represent nearly 70% growth over the prior year.
The rapid expansion has pressured cash flow. Operating cash flow fell to $2.2 billion from $2.5 billion a year earlier, even as net income more than tripled to $4.1 billion. Inventories doubled since the end of January to $21.3 billion as the company stockpiled components to meet its backlog.
Hedge fund interest rose in the second quarter, with 77 funds holding positions, up from 72 in the first quarter, according to Insider Monkey’s database. Short interest stood at 4.88% of the float as of August 31.
As of Wednesday, Dell traded at about 22 times forward earnings and 33 times trailing earnings.