Trump’s Remark Ignites Dell Shares: AI Server Leader Surges 13% to Record High. AI Agent May Be Next Driver.

During a Mother's Day event at the White House on Friday, Trump extended special thanks to the Dell family and told his supporters, 'Go out and buy Dell computers! They’re great!'

The 'presidential endorsement' is not an isolated case; on April 30, Trump posted on Truth Social to express support for Intel ( INTC ), which likewise drove its share price higher in after-hours trading. However, it should be noted that Intel retreated after a short-term surge. Retail investors have since summarized a 'Trump Effect' trading pattern: any company the president publicly backs will see a wave of retail buying in the short term.

Trump's rhetoric serves as a short-term catalyst, but the true fundamental support lies in its deep strategic positioning within the AI infrastructure sector.

First, the company has become NVIDIA's ( NVDA) core beneficiary of the Blackwell/Vera Rubin cycle, leading the shipment of desktop systems equipped with GB300 chips and partnering with TotalEnergies and NVIDIA to build the 'Pangea 5' supercomputer, which features a six-fold increase in computing power and is scheduled for launch in 2027.

Second, order data confirms the explosion in AI demand. According to the FY2026 Q4 earnings report, total annual AI orders reached $64.1 billion, with $34.1 billion added in the fourth quarter, bringing the total year-end backlog to $43 billion, far exceeding market expectations. Management provided guidance for FY2027 AI revenue to double to $50 billion during the earnings call.

Third, a trend of margin improvement is emerging. AI-optimized servers are the fastest-growing product line, with FY2026 sales projected to grow 164% year-over-year to $24.7 billion. Although the operating margin for AI servers is only in the mid-single digits—lower than the overall ISG level—improvements in operating leverage and service attach rates are gradually offsetting the decline in unit economics.

Since late April, institutions including Mizuho Securities, Bank of America ( BAC ), and Melius have frequently raised their price targets, collectively pointing to the core thesis of AI server demand exceeding expectations.

Mizuho Securities analyst Vijay Rakesh raised Dell's price target to $260 on May 6. Bank of America analyst Wamsi Mohan stated that the next phase of AI is Agentic AI, which is significant for further boosting demand for AI servers, storage devices, and traditional servers.

However, Dell's stock price has doubled year-to-date, and the average Wall Street price target remains below its current market price. The cautious stance of institutions such as Morgan Stanley ( MS) and others should not be overlooked.

Dell's stock price has been buoyed recently by Trump's remarks, but market focus is shifting toward its fundamental performance, where the key to supporting its valuation remains the order backlog and technological capabilities in the AI server sector.

The company will release its latest earnings report after the market close on May 28. Investors should focus on whether the approximately $43 billion backlog can be converted into actual revenue and if gross margins for the AI server business show signs of improvement.

Furthermore, the continuous price hikes in memory chips may squeeze the profit margins of downstream hardware manufacturers, a pressure Dell also faces. With its stock price having more than doubled this year, the high valuation could face a correction if performance falls short of expectations.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.