Enterprise data center refresh. The firm projects a pronounced replacement cycle in 2026, as organizations upgrade hardware installed during earlier spending waves. Dell’s broad product portfolio—ranging from rack servers to hyper-converged infrastructure—places it in what the analysts call a “front-row seat” to benefit.
Artificial intelligence build-outs. Approximately 45 percent of Dell’s server revenue is already connected to AI workloads, according to Piper Sandler. Demand for accelerated computing, high-capacity storage, and low-latency networking is growing across industries deploying generative AI and machine-learning models, reinforcing the company’s positioning.
Windows 10 end-of-life. Microsoft support for Windows 10 concludes on Oct. 14, 2025. As detailed on the company’s official product lifecycle page, roughly half of existing commercial PCs still run the operating system. Piper Sandler believes the approaching deadline could trigger a sizable PC replacement wave, benefiting Dell’s client solutions segment.
Stock performance and valuation
Dell shares have gained roughly 250 percent since November 2022, a move the brokerage attributes to the market’s growing perception of the company as an AI infrastructure supplier. Despite the substantial run-up, Piper Sandler argues that the stock does not fully discount the magnitude of the 2026 server and storage refresh cycle, nor the incremental sales tied to Windows migration projects.
The $172 price objective implies additional upside from current trading levels at the time of the report. The firm’s model factors in mid-double-digit revenue growth in Dell’s Infrastructure Solutions Group, as well as stable margins in its PC unit despite competitive pressure from other hardware vendors.
Risks highlighted
The note also identifies factors that could temper Dell’s growth trajectory. Chief among them is the ongoing shift by enterprises toward public cloud services, which can reduce demand for on-premises servers and storage. Piper Sandler further cautions that Dell could lose PC market share if consumers and businesses favor rival brands during the Windows replacement cycle.
Additionally, the analysts point to macroeconomic uncertainty and potential delays in corporate capital-expenditure budgets. If technology spending weakens, the timing and scale of the envisioned refresh could slip, affecting Dell’s revenue forecasts.
Company overview
Dell Technologies, headquartered in Round Rock, Texas, provides information-technology hardware, software, and services to customers worldwide. Its Infrastructure Solutions Group sells servers, storage arrays, and networking equipment, while the Client Solutions Group offers laptops, desktops, and peripherals to commercial and consumer buyers. The company also operates a small but growing services unit that supports multi-cloud deployments and cybersecurity solutions.
In recent quarters, management has emphasized AI-ready systems and integrated solutions designed to simplify deployment of large language models and data analytics workloads. The company has partnered with leading semiconductor manufacturers to supply accelerators and processors optimized for AI training and inference.
Outlook into 2026
Piper Sandler’s forecast assumes that many enterprise data centers will reach the end of a typical four- to five-year hardware refresh cycle in 2026. The firm expects heightened demand for servers equipped with advanced CPUs and GPUs, higher-density storage, and updated networking fabrics capable of supporting AI and other data-intensive applications. Dell’s existing channel relationships and ability to bundle hardware with financing options are viewed as competitive advantages in capturing that spend.
Separately, the sunset of Windows 10 support is projected to influence corporate IT budgets in 2025 and early 2026. Companies that postpone migration could face higher support costs and security risks, encouraging them to replace aging PCs. Dell, traditionally a leading supplier of commercial notebooks and desktops, may see incremental unit shipments as the deadline approaches.
While Piper Sandler acknowledges the competitive and macroeconomic risks, the brokerage concludes that the combination of AI infrastructure investment, operating-system migration, and a broad data center refresh cycle could provide Dell with multiple avenues for revenue growth. The firm’s Overweight rating reflects confidence that these factors, taken together, outweigh potential headwinds from public cloud adoption and PC share shifts.
Market participants will monitor Dell’s quarterly results and guidance for signals that enterprise customers are beginning to allocate budgets for the cycles envisioned by Piper Sandler. Any evidence of early orders for AI-optimized servers or increased PC procurement tied to Windows 10 replacement could validate the brokerage’s projections ahead of the 2026 time frame.
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