Dell Stock Looks Less Expensive Once You Count The AI Backlog

Dell Technologies (DELL) stock has more than quadrupled over the past year, while the S&P 500 gained 18% (as of September 25, 2026). At about 32 times trailing earnings, it looks stretched. Those earnings are adjusted: normalized net income with stock-based compensation added back, a measure defined differently from the analyst forecasts behind the forward multiples. Yet most of what makes the stock look cheaper sits in a year Dell has already guided and half reported.

Why Dell Looks Expensive After A Run Like That

The trailing figure looks back at a smaller Dell. Revenue over the last twelve months was $151.2 billion. Management guides $192 billion for fiscal 2027.

Dell booked a record $60.9 billion in AI orders in fiscal Q2 2027, with demand broadening across sovereigns and enterprise customers. Traditional server and networking revenue rose 122% from a year earlier in fiscal Q2 2027, with most of that growth coming from existing customers modernizing their data centers.

But Dell Has Already Guided The Year That Makes It Look Cheaper

On analysts' per-share forecasts, Dell trades at about 21.7 times fiscal 2027 earnings and 18.2 times fiscal 2028 earnings, down from about 32 times on its trailing measure.

That year is less of a guess than most forecasts. Management guides non-GAAP earnings of $25.50 a share, and analysts sit just above it at about $25.89. Dell has already reported the first two quarters.

Orders are not Dell's constraint. It ended fiscal Q2 2027 with a record $95 billion of AI backlog. In May, management said it expects to carry meaningful backlog into fiscal 2028.

So What Has To Go Right For Dell After That?

Fiscal 2028 is the real forecast, and the eight analysts covering it disagree widely. Their estimates run from $25.03 to $37.69 a share. The lowest is below what management guides for fiscal 2027.

Three things decide where Dell lands. The first is parts. Demand has outrun supply for two straight quarters, and management names DRAM and NAND as the tightest components.

The second is price. Management concedes there is inflation inside its traditional server growth, and says customers are ordering further ahead to secure supply. Analysts have asked whether pricing and pre-buying explain the surge better than real demand does.

The third is margin. Dell's operating margin over the last twelve months was 9.6%, up from about 7% in fiscal 2026. Analysts have earnings growing more slowly than revenue from fiscal 2027 to fiscal 2028, which assumes margins slip. The CFO does not expect every benefit behind the fiscal Q2 2027 margin of the server, networking, and storage business to last. He says the quarter also reflects structural improvements. On the fiscal Q1 2027 call, he said AI server profitability was in line with a mid-single-digit operating margin target.

So Dell looks cheaper than its trailing multiple suggests, as long as fiscal 2027 lands near the guide. The fiscal 2028 multiple asks for faith that the parts arrive and the orders prove more than a rush to beat shortages.

So Is Dell Cheap Once The Backlog Ships?

Only if you trust the second year as much as the first. That takes a view on memory supply, on pricing and on what customers buy once the shortage eases.

Making that call for every stock you own is a full-time job. Since its inception, our rule-based High Quality Portfolio has outperformed its benchmark, a blend of three major indices.

Or start with our Forward Valuation Discount screen, which ranks stocks that look cheapest on forecast earnings. The forecast still has to come true.