Dell gets downgraded by UBS as analysts see little room for upside following recent stock run Proactive uses images sourced from Shutterstock
Dell Technologies Inc (NASDAQ:DELL) shares fell 3.8% on Monday after UBS downgraded the PC and server maker to Neutral from Buy, arguing that a blistering rally has left little room for further upside even as the company capitalizes on booming artificial intelligence infrastructure demand.
Analysts raised their price target to $243 from $167 but cautioned that the stock’s risk-reward profile had grown more balanced following a roughly 170% surge over the past 12 months, or more than five times the S&P 500’s gain of about 30% over the same period.
The downgrade reflects UBS’s concern that investor expectations have outrun the company’s own long-term growth targets. The bank estimates Dell will grow earnings more than 25% in fiscal 2027, driven by AI-optimized server revenue projected to rise more than 100% after climbing 152% in fiscal 2026. Dell has guided AI-related revenue to approximately $50 billion in FY27.
But UBS said market participants may already be pricing in earnings per share of around $17 for 2027, or roughly 25% above the firm’s own estimate of $12.85. That, according to analysts, implies that positive revisions to forecasts are already baked into the stock.
Analysts noted that recent legal troubles facing a rival AI server supplier could redirect orders from neocloud, enterprise, and sovereign customers toward Dell, potentially expanding the company’s order pipeline. However, they cautioned that Dell’s share price and valuation multiple have already risen about 70% since that development, while the near-term earnings benefit are more modest.
Even if Dell captures $20 billion in incremental revenue as a result, the earnings-per-share uplift would amount to less than approximately $1.50, or about 12% above FY27 estimates, UBS noted.
Given long component lead times, analysts do not expect upside from potential share gains to materialize until calendar year 2027.