Bank of America has lowered its price target on Dell Technologies to $135 from $150 per share, citing rising memory costs that threaten near-term profitability. Analyst Wamsi Mohan warned that memory prices have jumped 140% year-over-year, up from approximately 40% previously, potentially impacting Dell's fiscal 2027 earnings.

BofA's updated modeling shows a potential 489-basis-point hit to gross margin and a $2.48 drag on earnings per share for fiscal 2027. The bank now expects Dell to earn $10.00 per share in fiscal 2027, down from its previous estimate of $10.86. While both Infrastructure Solutions Group and Client Solutions Group margins will face pressure, BofA notes that ISG should prove more resilient due to its 'mission critical' portfolio and robust demand.

Despite the near-term challenges, BofA maintains a Buy rating on Dell stock, emphasizing that the company's long-term earnings power remains intact. The firm points to enterprise AI adoption, emerging AI PC tailwinds, and rising attachment of Dell's storage intellectual property as key growth drivers. BofA believes Dell can mitigate some impact through operational efficiencies, supply chain management, and strategic pricing.