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Despite a notable drop in Dell Technologies (DELL) stock following mixed third-quarter financial results, Wall Street remains optimistic about the company's future. Dell's stock fell by more than 10% after the computer maker issued the results and lowered its forward guidance. However, several analysts have issued positive notes on the stock, underscoring its potential, particularly in the AI server market.

Ben Reitzes, a highly rated analyst at Melius Research, increased his price target on DELL stock from $140 to $155 and reiterated a Buy rating. Reitzes acknowledged the disappointment surrounding the lowered guidance but emphasized that the situation isn’t as dire as it seems. "While Dell's fourth-quarter outlook is a near-term blip, the commentary around margins and demand for 2026 takes our estimates modestly higher," Reitzes wrote in a note to clients.

Following suit, Asiya Merchant, a top-rated analyst at Citigroup, raised his price target on Dell stock to $160 from $156 and maintained a Buy rating. Additionally, Amit Daryanani from Evercore ISI also kept a Buy-equivalent Outperform rating on DELL stock with a $150 price target. All three analysts highlighted the growth opportunity Dell has through sales of its high-efficiency servers designed to run artificial intelligence (AI) microchips and processors.

Dell reported a 34% increase in sales of its AI servers, reaching $11.40 billion in Q3. The company also noted $3.6 billion worth of future AI server orders during the same period. This segment's robust performance indicates significant demand that could drive Dell's growth in the coming years.

Currently, Dell stock has a consensus Strong Buy rating among 18 Wall Street analysts, composed of 15 Buy and three Hold recommendations over the past three months. The average price target of $148.43 suggests a potential 19.36% upside from current levels, further indicating strong confidence in Dell's growth prospects despite recent setbacks.

As Dell continues to capitalize on the burgeoning AI market, investors and analysts alike are keenly watching to see if the company can maintain its momentum and overcome near-term challenges.