The stock of PC maker Dell Technologies (DELL) accelerated on Wednesday, ending regular trading 9% higher at about $165 per share after Wall Street analysts rained price target boosts on the stock.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The move came after Texas-based Dell elevated its long-term financial projections, attributing its bullish mood to the robust demand for artificial intelligence infrastructure, including AI-powered servers, amid the AI boom.
Similarly, the tech company recently raised its outlook for the third quarter and full Fiscal year 2026. Key among the updated annual targets through Fiscal 2030 includes higher revenue growth expectations of 7-9% and about 15% jump in adjusted diluted earnings per share growth.
Dell Makes $20B in Two Years from AI Business
Jeff Clarke, Dell’s vice chairman and chief operating officer, also noted that the company raked in about $20 billion in two years from its AI business. This is even as the company this month raised $4.5 billion through a senior note offering to strengthen its financial base amid a massive stock sell-off.
Analysts from Bank of America Securities (BofA) (BAC), Citi (C), Morgan Stanley (MS), JPMorgan (JPM) and Mizuho (MFG) all attributed their price target boosts to Dell’s bullish forecast based on expected boom in its AI server business.
In particular, BofA analyst Wamsi Mohan, who raised his price target to $170 at a 3.32% upside, pointed to gains expected from sales of the Dell’s AI-enhanced personal computers and the current PC refresh cycle — a period when businesses and individuals replace their older computers with newer models.
Analysts Question AI Server Adoption, Margins
Furthermore, Morgan Stanley’s Erik Woodring noted that while Dell’s AI server mix, or the growing share of revenue made from sales of its servers tailored for artificial intelligence tasks, is expected to put pressure on profit margins due to higher production costs, the company’s efforts to strengthen its core businesses could help support overall margins.
However, other analysts are less optimistic. TD Cowen analyst Krish Sankar, who gave DELL stock a Hold rating despite raising his price target to $150 from $130 per share, noted that the rate at which business organisations will adopt AI servers remains uncertain and may exert more pressure on Dell’s finances.
This pressure could also come in the form of higher spending on research and development, the analyst said. Furthermore, Sankar observed that the current PC refresh cycle, while steady, appears no different from previous ones, even as Dell’s operating margin appears stagnant.
In addition, JP Morgan analyst Samik Chatterjee, despite rating DELL stock Overweight with a upper-range price target of $165, noted that Dell’s margins remain a “show-me” story — this means that he believes that some investors remain skeptical about the raised prospects, awaiting proof of more concrete performance.
Is DELL Stock a Good Buy Now?
Across Wall Street, Dell’s shares currently have a Moderate Buy consensus recommendation, as seen on TipRanks. This is based on 11 Buy and six Hold ratings assigned by 17 analysts over the past three months. Furthermore, at $160.87, the average DELL price target suggests a 2% downside risk from the current level.
