Shares of Dell Technologies (DELL) hit an all-time high of $179.70 on May 29, 2024. However, the rally didn’t last, and the stock has dropped roughly 36% since then, as broader concerns about an economic slowdown and reduced enterprise IT spending rattled investors.

While macroeconomic uncertainty persists, Dell’s fundamentals remain solid, with the company delivering strong financial results driven by artificial intelligence (AI) demand. Moreover, Dell stock is trading at a compelling valuation, which will likely support its share price. Let’s take a closer look.

AI Demand: Dell’s Growth Engine

Dell’s recent quarterly earnings reflect the strength of the AI tailwind for the company. In its first quarter of fiscal 2026, Dell’s Infrastructure Solutions Group’s (ISG) revenue was $10.3 billion, up 12%. The company witnessed significant demand for AI servers. Thanks to the solid demand trends, Dell’s earnings per share (EPS) of $1.55 jumped about 17% year-over-year, much faster than its revenue growth rate.

The company recorded $12.1 billion in AI-related orders during the quarter, which was more than what it shipped in the entire previous fiscal year. Actual shipments for the quarter came in at $1.8 billion, leaving Dell with a significant backlog of $14.4 billion.

Notably, demand is showing no signs of slowing, with a solid and growing pipeline across cloud service providers and enterprise customers in multiple sectors.

While Dell is seeing solid demand, the company is rapidly deploying large-scale AI server clusters, supporting its growth. Dell’s end-to-end support services, including managed services and flexible financing options, enable customers to scale their AI infrastructure and, in turn, drive the company’s financials.

Looking ahead, Dell is doubling down on AI. It’s enhancing its AI Factory approach, providing the compute, storage, networking, and software foundation needed to power next-gen AI applications. Innovations span from AI-capable PCs to cutting-edge data center platforms.

Over the past quarter alone, Dell has expanded its portfolio with Copilot+ capable AI PCs, upgraded notebooks and desktops powered by Nvidia’s (NVDA) RTX Pro Blackwell GPUs, and new Intel (INTC) and Advanced Micro Devices (AMD) processors.

On the server side, Dell is expanding with air-cooled and liquid-cooled platforms designed to reduce energy costs and enhance performance in AI-intensive environments.

The company’s new AI Data Platform is another growth catalyst. Dell is offering high-speed, scalable storage solutions and advanced software integrations that will support future financial growth.

Further, Dell’s growing network of partners is another strategic advantage. Collaborations with tech leaders to bring AI models on-premises and simplify on-premises deployment of agentic AI is strengthening its position in the AI space. Dell is also innovating in the private cloud segment, introducing platforms that make it easier for enterprises to deploy and manage AI workloads efficiently.

These initiatives will ultimately drive Dell’s revenue and earnings, supporting its share price.

Dell Stock Trades at Attractive Valuation

While Dell is consistently delivering solid financials and is poised to benefit from strong AI demand, its stock is still trading at a very reasonable valuation. Dell stock has a forward P/E ratio of just 13.7x, and its price-sales (P/S) ratio sits at 0.83x. For a company growing as quickly as Dell, those numbers are hard to ignore.

Since FY21, the company’s earnings per share (EPS) have grown at a compound annual growth rate (CAGR) of 14%. Moreover, the company’s management projects FY26 adjusted EPS to increase by 15%.

Its reasonable valuation, double-digit earnings growth rate, and AI tailwinds suggest further upside in DELL stock.

Here’s What Analysts Recommend for Dell Stock

Wall Street analysts remain optimistic about Dell’s future and have a "Strong Buy" consensus rating. The average price target of $131.87 suggests 16% upside from current levels. Moreover, the Street-high price target of $155 represents a 37% potential gain from current levels.

Can Dell Stock Surpass $179?

With strong financials, double-digit earnings growth, and a foothold in the high-growth AI space (with $14.4 billion in backlog) — all at a reasonable valuation — Dell stock has plenty of room to run and could very well reclaim and surpass its previous high of $179.70.