Morgan Stanley Stays Underweight on DELL Despite Strong AI Server Momentum

Core Insights - Dell Technologies Inc. is gaining attention in the AI sector, with Morgan Stanley raising its price target to $113.00 while maintaining an "Underweight" rating, highlighting the strong performance of its AI server business [1] Group 1: Financial Performance - Dell's AI server orders surged over 150% in fiscal 2026, reaching $30 billion in orders, with expectations of a 50% revenue increase in fiscal 2027, totaling $37 billion [2] - The strong AI server business is contributing significantly to the company's fourth-quarter revenue guidance and earnings per share (EPS) upside compared to estimates and consensus [1] Group 2: Challenges - The company faces challenges due to a memory supercycle, which is causing price spikes and supply issues, impacting demand and margins for fiscal 2027 [3] - Dell has acknowledged the unprecedented nature of the memory supercycle, indicating that the cost basis for all product categories will be affected by memory inflation [3] Group 3: Investment Perspective - While Dell shows potential as an investment, there are other AI stocks perceived to offer greater upside potential and lower downside risk [4]