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Shares of Dell Technologies (DELL) trade at 26.6 times adjusted earnings over the twelve months to July 2026. This metric adds after-tax stock-based pay back to normalized net income, yielding a multiple that appears steep for a seller of servers and PCs. That multiple applies to profit the company has already earned, and the picture shifts when evaluated against expected profit over Dell's next two fiscal years. So what does a buyer at that price have to believe about those two years?
Dell Buyers Are Betting On Far Bigger Profits
Buyers are betting that Dell's profit more than doubles in fiscal 2027. The consensus forecast places profit at $18.5 billion, compared to the $7.05 billion Dell reported for fiscal 2026 on its own adjusted basis. Estimated sales climb to $195 billion that year, up from $113.5 billion.
A price set on far bigger profit is a bet the business must deliver. To see this in practice, look at Tesla, priced at about 13 times sales on FSD, which is in fewer than 1 in 170 American vehicles. Read Trefis Big Story: How Tesla Blundered .
The consensus forecast for fiscal 2028 expects sales to grow another 20.9% but profit by only 4.6%, meaning Dell would keep a smaller share of each sales dollar as profit. The average forecast of earnings per share climbs faster, rising from $25.91 to $30.99. That year's forecast also carries uncertainty, with estimates of earnings per share spread far apart.
Based on the consensus forecast, the share price that trades at 26.6 times past earnings sits at 16.6 times Dell's fiscal 2027 profit. Applied to fiscal 2028 profit, that same price represents a multiple of 15.9 times. On the per-share forecasts, the multiples are 18.4 times for fiscal 2027 and 15.3 times for fiscal 2028, because the two forecasts imply different share counts.
Is Dell Delivering The Growth Buyers Expect?
The fiscal 2027 sales forecast asks Dell to hold the pace it has already set. Revenue grew 71% in the first half of fiscal 2027, and the forecast implies about 72% for the full year, or about 73% growth in the second half. That pace is more than three times the 20.9% growth forecast for fiscal 2028.
Management's own sales guide for fiscal 2027 aligns closely with the forecast for that year. In a September 1, 2026 release, management raised that guide to $192 billion, up from $167 billion in May. The consensus forecast sits just 1.6% above that guide.
More than half of that raise came from AI servers: management now expects $74 billion of AI server revenue in fiscal 2027, up from an outlook of $60 billion in May. Dell also finished its fiscal second quarter with a record $95 billion AI backlog, representing orders taken but not yet delivered.
Where Could Dell Fall Short Of The Forecast?
The margin represents the likeliest place for a shortfall. Under the consensus forecast, Dell earns a net margin of 9.5% in fiscal 2027, compared to 6.2% in fiscal 2026, and this wider margin remains an assumption. During its latest quarter, to July 2026, Dell's GAAP net margin was 8.8%; on the adjusted basis the forecast uses, it was 9.8%. Management cautioned that it would not expect every benefit behind that quarter's margin to continue at that level, and guided the operating margin of its PC business down to about 6% in the third quarter from 7.6%.
Management offered signals in both directions on the September 1 call. Executives said Dell's second-half gross margin outlook had improved. They also stated that gross margin rates are up from a year earlier when the mix effect of AI servers is excluded, which points the other way. This serves as a sign that AI servers earn a lower margin rate than Dell's other sales. As a result, the faster those AI server sales grow, the harder the forecast's net margin is to reach, and the profit forecast would come down.
Dell's supply of parts is the other risk . Management said Dell is supply constrained, with DRAM and then NAND memory chips the tightest components, and that demand outpaced supply in the quarter. If Dell cannot secure enough parts, its sales would trail the forecast regardless of how strong orders become.
If Dell achieves the net margin in the forecast, the multiples on expected profit provide a fair picture of what you pay. Sales carry more support, backed by management's guidance and a record AI backlog. The margin is the area where Dell is most likely to fall short, and if it does, you are paying for profit Dell has not yet shown over a full year, making the stock more of a gamble to own. Dell's adjusted net margin for its fiscal third quarter, which it is expected to report in November 2026, is the number to watch.
How To Act On DELL?
Now you know Dell Technologies better. Our purpose is to inform you so you can decide for yourself, and acting on one stock, in either direction, carries its own risk.
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