Dividends have long been one of the simplest ways companies reward their shareholders. While stock prices may rise and fall with the market, dividends provide investors with steady returns and often reflect a company’s financial strength and confidence in its future. In many ways, shares turn into a profitable partnership between patient-owned companies and their investors.
That said, dividend increases are not unusual. Companies frequently raise payouts as revenues grow. However, when the size of the increase is significant, it focuses attention and invites a closer look at the company behind the move.
That’s exactly what happened recently with Dell Technologies (DELL), a global technology company known for its computers, servers, and enterprise infrastructure that power modern data centers.
The company announced a 20% jump in its quarterly dividend, raising it to $0.63 from $0.525. While dividend increases are common, the scale of this increase is clear, especially as Dell benefits from artificial intelligence (AI)-driven growth and growing demand for AI infrastructure.
With this confidence on display, should investors consider picking DELL stock now?
Headquartered in Round Rock, Texas, Dell Technologies is one of the pioneers in the personal computer and server industry. Over the years, it has grown into a global technology leader helping businesses and individuals shape their digital future.
The company, boasting a market capitalization of $97.1 billion, offers a wide range of tools, infrastructure, and services designed for today’s data-driven world. Through its Infrastructure Solutions Group (ISG), Dell provides servers, storage, and networking systems that power AI and data-heavy workloads. Meanwhile, with its Customer Solutions Group (CSG) offering PCs, laptops, and workstations used by enterprises and consumers alike, Dell is firmly positioned at multiple layers of the modern technology ecosystem.
Dell shares have had a rough ride in early 2026. Stocks were under pressure as the broader hardware sector softened, while a few analyst downgrades, growing competition in the AI server space, and slower-than-expected adoption of AI-powered PCs weighed on sentiment.
However, things changed quickly after Dell reported strong fiscal Q4 earnings on February 26. Investors responded positively, sending the stock up nearly 22% in the next trading session. Thanks to this sharp rally, DELL stock is now up about 56% over the past 52 weeks.
The stock hit a 52-week high of $168.08 in November 2024 before falling to $110.22 in January. Since then, the shares have rallied strongly, rising nearly 33% and re-approaching previous highs.
Technically, the rebound looks well supported. Trading volume increased significantly, indicating strong buying interest. The 14-day RSI is sitting near 65, suggesting a strong move, although it could also signal a short break. Meanwhile, the MACD oscillator remains bullish, with the MACD line above the signal line and a positive histogram, indicating that an upward move is still in play.
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When it comes to value, DELL seems surprisingly reasonable. The stock trades at around 11.53 times adjusted earnings and around 0.71 times sales, better than most sector peers. At a time when many AI-related stocks carry high price tags, Dell looks more grounded. With strong growth prospects associated with AI infrastructure, this could be a smart entry point for investors.
Dell Technologies makes a clear effort to reward stakeholders. The company has now paid dividends for three straight years, and most recently paid a $0.63 per share payout on May 1. That brings Dell’s previous annual dividend to $2.52 per share, providing a yield of about 1.72% — comfortably above the S&P SPY 50’s yield of about 1.08%.
With a payout ratio of 20.3%, the dividend still leaves plenty of room for reinvestment. Dell also increased its share repurchase authority by $10 billion and returned $2.2 billion to shareholders through dividends and buybacks in the fourth quarter, reinforcing its commitment to shareholder value.
Dell Technologies released fourth-quarter results on February 26, and the server maker completed its 2026 fiscal year with record financial performance, driven largely by increased demand for AI-optimized servers and infrastructure.
Revenue for fiscal 2026 is projected to reach $113.5 billion, marking a 19% increase over last year. The bottom line also improved, with non-GAAP EPS up 27% year over year (YoY) to $10.30. The momentum was especially evident in the fourth quarter. Dell reported revenue of $33.4 billion, representing a significant increase of 39% YoY. Meanwhile, non-GAAP EPS rose 45% year-over-year to $3.89. Both the top and bottom lines beat Wall Street estimates.
The strong performance reflects continued demand for Dell’s AI solutions and the company’s ability to execute effectively as enterprises expand their computing capacity.
Strong cash generation remains another indicator. The company generated $11.5 billion in adjusted free cash flow, up 272% from last year, and returned $7.5 billion to shareholders, including repurchases of 54 million shares.
A big part of the story lies in Dell’s growing role in the AI infrastructure market. During fiscal 2026, the company generated $64.1 billion in AI orders and shipped $25.2 billion worth of AI systems. In Q4 alone, Dell delivered $9.5 billion in AI servers and ended the year with a record $43 billion. Even after fulfilling many orders, the company’s sales pipeline has expanded, suggesting that demand remains strong rather than a one-time increase.
Looking ahead, the momentum looks far from slowing down. Dell booked another $34.1 billion in AI orders, indicating continued customer support. The company’s AI customer base has also expanded significantly, now exceeding 4,000 customers. These customers range from cloud providers and independent organizations to traditional enterprises, demonstrating that AI infrastructure spending is spread across multiple industries.
Management believes this trend will remain a key growth driver. For fiscal year 2027, Dell expects AI-related revenue of around $50 billion, implying 103% YoY growth. With a strong backlog, a growing customer base, and a rapidly growing pipeline, Dell is well positioned as businesses around the world scale their AI workloads and modernize their data center infrastructure.
Dell management expects a strong start to the year. For Q1, revenue is expected to come in between $34.7 billion and $35.7 billion, with non-GAAP EPS of around $2.90. For fiscal 2027, management sees revenue in the range of $138 billion to $142 billion, indicating solid YoY growth of 23% at the midpoint, while non-GAAP EPS is estimated at around $12.90 for the year.
Analysts following Dell expect FY2027 EPS to rise around 27.8% YoY to $11.82 before growing 11.8% YoY to $13.21 in FY2028.
After Dell Technologies released its latest earnings report and an upbeat outlook, several brokerages revised their price targets for DELL, reflecting growing confidence in the company’s role in the rapidly expanding AI infrastructure market. For example, JP Morgan raised the target from $155 to $165 while maintaining an “overweight” rating.
The reasoning is simple—Dell is well-positioned for an era of AI-driven computing investment. As companies accelerate spending on AI infrastructure, the investment bank expects Dell’s ISG segment to benefit from strong demand, particularly for servers and storage systems. According to JP Morgan, this increase in AI-related spending could help Dell maintain double-digit revenue growth even as some of its traditional segments, such as PCs and general-purpose servers, face pressure from broader economic conditions.
The investment bank also believes that Dell’s current valuation may not fully reflect its exposure to AI infrastructure costs and that there is plenty of room for the stock to command several historically high valuations. Dell may not always be seen as the most direct beneficiary of the AI boom, compared to chipmakers like Nvidia (NVDA), but still, the opportunity remains significant because the AI ecosystem relies heavily on servers, storage, and networking systems—areas where Dell plays an important role.
Meanwhile, Bank of America analyst Vamsi Mohan also raised his price target for DELL from $155 to $135 while maintaining a “buy” rating. He believes the company’s outlook for next year looks “unexpectedly strong”, supported by steady demand and strong execution of AI.
However, analysts expressed a potential concern. Dell raised PC prices last year to adjust to higher costs, and those increases could ultimately affect demand. He anticipates that the second half of the year will be slightly smoother than the first. Even so, the analyst believes the overall trend remains positive, with enterprise AI adoption still in its early stages and demand for Dell storage and infrastructure solutions continuing to grow.
Analysts monitoring DELL are bullish, with a consensus rating of “moderate buy”. Out of 23 analysts, 15 recommend a “strong buy”, two recommend a “rational buy”, five are on the sidelines, rating it a “hold”, and one analyst advises a “strong sell”.
Its average price target of $165.76 implies a potential upside of 13.2%. At the same time, the high street target of $200 suggests that DELL stock may rise by 36.5% from the current price level.
Putting all this together, Dell Technologies seems to be steadily strengthening its investment case. The company benefits from a strong AI infrastructure, delivering strong revenue growth while maintaining a relatively reasonable valuation. Meanwhile, the 20% dividend increase and expansion of the buyback program signal management’s confidence in the company’s cash generation and long-term outlook.
Of course, risks remain, including cyclical pressure in the PC market and broader macro uncertainty. But with strong demand for AI servers, a growing backlog, and steady analyst support, Dell Technologies seems poised for growth. For investors looking into the AI infrastructure space without paying significant valuations, the stock may be worth a closer look—though taking the plunge now may depend on individual risk appetite.
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As of the date of publication, Sristi Suman Jayaswal did not hold positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
