- Dell’s shares soared by 11% after Morgan Stanley raised its price target, anticipating significant sales from AI server demand.
- Analysts predict Dell to capitalize on accelerating momentum in AI server construction, projecting $10 billion in revenue by fiscal year 2025.
- Nvidia’s chips, crucial for AI models, are driving Dell’s success, with CEO Jensen Huang endorsing Dell’s capabilities at a recent conference.
- Dell’s upcoming earnings announcement, coupled with Microsoft’s AI-driven PC features, signal promising prospects for both AI servers and PC sales.
Main AI News:
Dell’s stocks experienced a remarkable surge of over 11% on Wednesday, reaching an all-time high. This surge was instigated by Morgan Stanley’s upward revision of its price target, coupled with a promising forecast indicating that the company is poised to capitalize on the soaring demand for artificial intelligence servers.
Erik Woodring, an analyst at Morgan Stanley, expressed optimism about Dell’s accelerating momentum, particularly in securing contracts for AI server construction. In a note released on Wednesday, Woodring highlighted Dell’s potential to become a top contender in this domain, upgrading the price target on Dell shares from $128 to $152 each, and identifying it as a top pick for investors.
Woodring’s note emphasized the substantial AI server momentum observed at Dell, surpassing that of other original equipment manufacturers (OEMs). He projected a staggering $10 billion in AI server revenue for Dell’s fiscal year 2025, ending next February.
This surge in Dell’s stock price marks its most significant leap since March 1, propelled by strong earnings showcasing the company’s advantageous position amidst the AI boom.
In the landscape of AI servers, Nvidia’s chips reign supreme, powering advanced AI models utilized by tech giants like Google, OpenAI, and Meta. Dell stands out by offering servers equipped with Nvidia’s latest AI chips, including the H100 GPU and the cutting-edge Blackwell-generation chips.
At Nvidia’s annual conference in March, CEO Jensen Huang underscored Dell’s prowess in delivering end-to-end AI systems at scale, positioning Dell as the go-to destination for customers seeking the latest AI innovations.
Woodring’s analysis underscores Dell’s robust business outlook, driven by burgeoning demand for AI servers and projected market share expansion. He anticipates Dell’s ability to upsell additional hardware, such as data storage solutions, further enhancing its revenue prospects.
Looking ahead, Dell is slated to announce its earnings for the April quarter on May 30, coinciding with Nvidia’s earnings report for the quarter ending in April on May 22. Additionally, Dell’s PC business is poised for growth, fueled by Microsoft’s forthcoming unveilings of new capabilities, including anticipated AI features that are expected to stimulate demand for new PCs.
Despite a recent slump in PC sales due to the post-pandemic slowdown, the industry is showing signs of recovery, surpassing earlier projections. Woodring remains bullish on the PC market’s resurgence, citing increased demand for upgrades and refreshes, along with positive revisions to notebook ODM builds in recent months. This optimism bodes well for Dell’s continued success in both the AI server and PC markets.
Conclusion:
Dell’s remarkable surge in stock value, driven by bullish forecasts surrounding AI server demand, underscores the company’s strong positioning in the technology sector. With projected revenue growth and endorsements from industry leaders like Nvidia, Dell is poised to further solidify its presence in the AI server market. This surge also signals positive prospects for the broader technology market, indicating sustained demand for advanced computing solutions and potential opportunities for investors and stakeholders alike.
