Dell Technologies shares rose 10% in Friday trading after RBC Capital Markets initiated coverage of the company with an outperform rating and a $640 price target.
The gain added to an already sharp rally in 2026, with Dell stock now up more than fourfold this year. Investors have increasingly viewed the longtime PC maker as one of the leading suppliers of Nvidia-based servers and related hardware as cloud providers and enterprises ramp up spending on artificial intelligence.
In a note published Thursday, RBC analyst David Paige said there were no signs of a slowdown and argued that Dell remains well positioned to benefit from a multiyear AI infrastructure spending cycle.
According to RBC, Dell has a $95 billion server order backlog that it has not yet begun to fulfill. The company also sold about $16.4 billion of AI servers in its second quarter.
Earlier this month, Dell reported second-quarter results that beat estimates and raised its full-year fiscal forecast to $192 billion. That would represent nearly 70% sales growth from last year.
Executives also told investors that Dell is raising prices because of higher costs for computer components such as memory, a factor that contributed to the stronger guidance.
Dell was among the first companies to ship Nvidia's Grace Blackwell NVL72 racks, a sign of its close ties with Nvidia and its ability to secure GPU supply. The company also serves neocloud customers including CoreWeave.
AI-related demand is also lifting other parts of Dell's business. Revenue from products not based on Nvidia GPUs, including storage, rose 26% in the most recent quarter. In RBC's view, that leaves Dell effectively acting as a one-stop shop for companies building out AI infrastructure.
Paige also said Dell's best-in-class supply chain is a key competitive advantage. During periods of supply disruption and constraints, customers are increasingly turning to Dell as a steady partner, he wrote.
In July, U.S. President Donald Trump, who has bought Dell shares since returning to office last year, again recommended buying Dell computers.
