Goldman Sachs has initiated coverage of Dell Technologies with a Buy rating, highlighting strong momentum in AI-driven server demand as a primary catalyst for future upside. The firm projects meaningful revenue and margin expansion over the next 12 to 18 months.
- Goldman Sachs initiated Dell Technologies (DELL) with a Buy rating on January 17, 2026
- AI server demand grew 25% YoY in Q4 2025, a key driver of growth
- AI-related server revenue expected to reach 30% of data center sales by end-2026
- Operating margin expansion projected at 1.8 percentage points annually through 2027
- 12-month price target set at $145 per share, implying 22% upside from current levels
- Dell's partnerships with cloud providers and AI software platforms strengthen market position
Goldman Sachs has launched coverage of Dell Technologies (NYSE: DELL) with a Buy rating, signaling confidence in the company's ability to capitalize on accelerating demand for AI infrastructure. The firm identified AI server deployments as a central growth engine, particularly within enterprise and cloud environments where Dell is well-positioned to supply high-performance computing hardware. The analysis underscores that Dell's data center solutions segment is experiencing a structural shift, with AI-related workloads driving a 25% year-over-year increase in server unit shipments during the fourth quarter of 2025. This growth trajectory is expected to continue into 2026, supported by contracts with major cloud providers and financial institutions scaling their AI operations. Goldman Sachs estimates that AI-related server revenue could account for 30% of total data center sales by the end of 2026, up from approximately 15% in early 2025. Operating margins in the infrastructure solutions division are projected to expand by 1.8 percentage points annually through 2027, driven by economies of scale and higher ASPs on AI-optimized hardware. The firm maintains a 12-month price target of $145 per share, representing a 22% upside from the current trading level as of January 17, 2026. The initiation impacts a broad set of stakeholders, including institutional investors tracking AI infrastructure exposure, semiconductor suppliers like NVIDIA and AMD whose products underpin Dell’s AI servers, and enterprise clients investing in next-generation data centers. Dell’s strategic partnerships with leading AI software platforms further enhance its market positioning.