Dell Technologies stock rose 12% on Friday after RBC Capital Markets initiated coverage of the computer maker and gave it an outperform rating and a price target of $640.
Friday's rise comes as Dell shares have more than quadrupled so far in 2026, as the longtime PC maker has emerged as one of the top vendors for Nvidia-based servers and related equipment that cloud companies and enterprises are snapping up for artificial intelligence.
"With no signs of slowing, we believe DELL continues to be well positioned to benefit from a multi-year AI infrastructure spending cycle," RBC analyst David Paige wrote in the note on Thursday.
Dell has $95 billion in sales in its server order backlog that it hasn't yet started to fill, and it sold about $16.4 billion of AI servers in its second quarter, RBC said.
Dell reported second-quarter earnings earlier this month that surpassed estimates and the company upped its fiscal full-year forecast to $192 billion, which would be a nearly 70% increase in sales over last year.
Dell executives told investors on the earnings call that it is increasing prices because of rising costs for computer parts such as memory, which factored into the elevated guidance.
The computer maker was among the first to ship Nvidia's Grace Blackwell NVL72 racks, highlighting the company's close relationship with Nvidia and its ability to secure supply of the company's GPUs. Dell supplies neoclouds including CoreWeave.
Dell's products that aren't based on Nvidia GPUs, such as storage, are also seeing increased demand driven by AI, with storage revenue rising 26% in the most recent quarter. Effectively, Dell can be a one-stop shop for companies looking to stand up AI infrastructure, according to RBC.
"Dell's best-in-class supply chain represents a competitive moat that differentiates the company during periods of supply disruption, as customers increasingly turn to Dell for a 'calming hand' during periods of supply volatility/constraints," Paige wrote.
In July, President Donald Trump, who has bought Dell shares since returning to office last year, again recommended buying Dell computers.
