08:53 AM EDT, 05/21/2025 (MT Newswires) -- Dell Technologies ( DELL ) is expected to slightly beat April quarter estimates, with stronger growth projected in the second half of the year, fueled by rising demand for its AI server offerings, Morgan Stanley said in a note late Tuesday.

Morgan Stanley raised its fiscal 2026 earnings estimate to $9.30 per share on $102.3 billion in revenue, up from a previous estimate of $7.26 EPS on $98.75 billion.

Despite the positive momentum, Dell is unlikely to raise full-year guidance this quarter due to ongoing tariff uncertainty, the brokerage firm said.

AI servers remain Dell's key growth engine, with $2.3 billion in revenue forecast for fiscal Q1 and $3.6 billion for fiscal Q2, supported by a more than $11 billion backlog, the brokerage firm said, adding that however, supply constraints and low margins on early AI shipments are limiting near-term earnings impact.

Traditional infrastructure demand appears stable, with Dell gaining share in servers and storage, though the broader market remains muted, Morgan Stanley said.

Morgan Stanley maintains an 'overweight' rating, raising the price target to $126 from $89.