Investing.com -- Bank of America analysts trimmed their target price on Dell (NYSE:DELL) stock to $150 from $155 ahead of the company’s fiscal Q4 report, due to possible near-term risks associated with AI servers.

The bank’s long-term bullish view on the stock remains intact, with the analysts reiterating a Buy rating.

Dell is set to report its fourth-quarter results on February 27th. BofA predicts that discussions will focus on AI server backlogs and the Blackwell delays.

The firm's revenue model for F4Q stands at $24.7 billion, slightly above the Street's consensus of $24.6 billion and within the guidance midpoint of $24.5 billion.

The analysts project Infrastructure Solutions Group (ISG) revenues to increase by 26.2% year-over-year and Client Solutions Group (CSG) revenues to rise by 2.6% year-over-year.

BofA's earnings per share (EPS) estimate for F4Q is $2.50, in line with Dell's guidance and just below the Street's estimate of $2.52.

For the first fiscal quarter of 2026 (F1Q26), BofA projects revenues of $23.2 billion and EPS of $1.84, compared to the Street's expectations of $23.8 billion in revenue and $1.82 in EPS.

“While the near-term set-up could be challenged on AI server revs/margins, we believe this to be transitory,” analysts led by Wamsi Mohan noted.

They expect revenues and margins to improve over time as Dell starts to meet the demand for AI servers and as customers transition to more enterprise and sovereign solutions.

The analysts highlight that AI server revenues continue to be unpredictable, with Dell management previously guiding a quarter-over-quarter decline due to Blackwell shipment issues.

BofA estimates AI server revenue for Q4 at $2.5 billion, a 14% decrease from the previous quarter. However, the bank forecasts a robust AI server backlog exiting Q4 at $5.6 billion, anticipating a recovery in revenues once Blackwell shipping volumes increase.

Looking ahead to the full fiscal year 2026 (F26), BofA expects Dell to guide total revenues in the range of approximately $101 to $105 billion. The firm models a high single-digit percentage year-over-year revenue growth, driven by mid-teens percentage growth in ISG and mid-single-digit percentage growth in CSG.

In the report, Mohan and his team also highlight the possibility of a significant $5 billion AI server deal between Dell and Elon Musk's xAI, which could potentially boost AI server revenues in the future.

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