Bengaluru, India – Dell Technologies experienced a remarkable surge on Friday, with its stock soaring 25% to reach a new all-time high of $118.8. This surge was fueled by an optimistic annual forecast that hinted at the company’s success in the burgeoning field of artificial intelligence (AI).
According to Dell’s COO Jeff Clarke, the company has strategically positioned itself in the AI sector, leading to an increased demand for PCs and servers equipped with AI capabilities. Specifically, orders for Dell’s AI-optimized servers, such as the PowerEdge XE9680, saw a significant 40% sequential increase in the fourth quarter.
Following the positive results, at least nine brokerages raised their price targets for Dell. The majority of analysts hold a “buy” or higher rating for the company, with a median target price of $113. This surge marks a turnaround for Dell, which faced challenges in the past two years due to declining worldwide computer sales.
In contrast to Dell’s success, its competitor HP experienced a decline in sales for the seventh consecutive quarter in the recent three-month period. Analysts at Bernstein noted that Dell’s AI business showed promising progress in key metrics, while also mentioning a similar outlook on the PC market as HP – indicating a potential rebound in the second half of the year.
Looking ahead, Dell forecasted revenue between $91 billion and $95 billion for the current fiscal year ending in January 2025, surpassing analysts’ average estimate of $92.07 billion. This optimistic outlook suggests that Dell is well-positioned to capitalize on the growing AI trend and strengthen its market position in the coming years.