Dell Technologies (DELL) Climbs on ‘Low Default Risk’ Credit Rating

Core Insights - Dell Technologies Inc. has seen a significant increase in its stock price, rising by 5.88% to $141.77 following a positive credit rating upgrade from Fitch Ratings [1] - Fitch Ratings upgraded Dell's Long-Term Issuer Default Ratings (IDRs) from BBB to BBB+ and affirmed its Short-Term IDR at F2, indicating low default risk and adequate capacity to meet obligations [2] Financial Performance - The upgrade reflects Dell's core EBITDA leverage remaining below the previous 2x upgrade sensitivity since fiscal 2024, with expectations to maintain this level [2] - Dell's AI server business is projected to generate $20 billion in revenues for fiscal year 2026, a significant increase from nearly zero before fiscal year 2024 [3] Growth Drivers - Within its Infrastructure Solutions Group (ISG), Dell is expected to experience growth supported by a $11.7 billion backlog in fiscal 2Q26, although growth may moderate over the ratings horizon [4] - The rising data needs for generative AI are increasing system complexity and inventory requirements, which may impact quarterly results due to timing effects [4]