Dell Technologies (DELL) saw its stock close at a record $260.46 on Friday, May 8, 2026, following a 13.11% jump fueled by public praise from President Donald Trump and strong demand for its AI infrastructure. However, Wall Street is now questioning whether the rally has gone too far, as UBS downgraded the stock to Neutral from Buy, citing that the company's AI server growth story may already be fully reflected in its valuation.
UBS analyst David Vogt raised the price target to $243 from $167 but noted Dell's shares have soared approximately 170% over the past 12 months, far outpacing the S&P 500's 30% gain. Vogt warned that the market might be pricing in fiscal 2027 earnings per share of $17, which is about 25% above UBS's own estimate. The downgrade comes ahead of the U.S. cash session on Monday, May 11.
Dell's transformation from a PC-centric company to a key player in AI infrastructure is driving the narrative. The company projects AI-optimized server revenue of roughly $50 billion by fiscal 2027, more than double current levels. "The AI opportunity is transforming our company," said Chief Operating Officer Jeff Clarke. This segment, which provides the backbone for training and deploying AI models, has sharply lifted Dell's full-year outlook.
President Trump's comments on Friday provided an unexpected boost. During remarks at the White House, he praised the Dell family and urged listeners to "go out and buy a Dell." Separately, Mizuho analyst Vijay Rakesh maintained an Outperform rating and raised his price target to $260, citing strong enterprise AI demand.
Demand for Dell's AI solutions is also evident in recent deals. Last month, Boost Run signed a $1.44 billion agreement with Dell to purchase AI compute and storage infrastructure. David Singer, Dell's senior vice president of operations, committed to helping Boost Run scale by providing hardware, software, and additional financing capabilities.
On May 6, TotalEnergies announced a partnership with Dell and Nvidia to build Pangea 5, a supercomputer in France. The project will increase TotalEnergies' computing power sixfold and cost over 100 million euros, highlighting Dell's expanding role beyond big cloud providers.
However, competition is intensifying. In March, Reuters reported that Hewlett Packard Enterprise (HPE) is scrambling with Dell and Super Micro Computer (SMCI) for market share in the cutthroat AI server space. Companies are also grappling with surging memory chip prices linked to the AI boom, forcing them to adjust pricing and protect margins.
Dell is also making a structural change: its board is seeking shareholder approval to reincorporate from Delaware to Texas at the annual meeting scheduled for June 25. According to the company, the move will not affect day-to-day operations, management, strategy, assets, or employee locations.
The key question now is how much of the AI upside Dell can retain. If component costs outpace what Dell can charge, or if enterprise AI deals stall before becoming actual shipments, the premium built into the stock could be at risk. With a record high, a White House endorsement, and a substantial order backlog, UBS's downgrade suggests that much of the good news is already priced in.
