Dell Technologies Inc. (NYSE:DELL) saw a remarkable surge in its shares, catapulting them to an all-time high, with a remarkable 22.2% increase on Friday. This rally was spurred by the company’s upward revision of its full-year financial projections, driven in large part by the integration of artificial intelligence (AI) into its offerings and a resurgence in demand for computer hardware after a prolonged slump.
The stock price surged to $68.75, ultimately reaching a peak of $70.28 during the trading session, with trading volume exceeding 5.4 times its 10-day moving average. Dell’s stock performance for the year-to-date has been nothing short of impressive, with gains exceeding 70%.
JPMorgan analyst Samik Chatterjee commented on this development, stating, “Results and guidance corroborated the improving order trends in the broader enterprise vertical.” Chatterjee also pointed out that Dell’s success is consistent with similar positive trends observed in companies like CDW Group, Cisco Systems, and Hewlett Packard Enterprises.
Dell’s second-quarter results surpassed analyst estimates, with revenue and earnings per share (EPS) outperforming expectations. Specifically, revenue from servers and networking experienced an 11% increase from the first quarter, reaching $4.27 billion. This growth was fueled by heightened demand for AI-optimized servers, a segment that Dell has been actively capitalizing on.
While JPMorgan’s Chatterjee does not view AI as the sole driving force behind Dell’s success, he acknowledged its role in enhancing visibility for the company’s recovery. Dell emphasized that a substantial 20% of its AI orders, in terms of revenue, were attributed to AI-based servers.
In response to the favorable report, at least ten analysts raised their target prices for Dell’s shares. Leading the way were institutions like Credit Suisse and Evercore ISI, both of which highlighted Dell’s strategic positioning to reap the benefits of the AI revolution. According to Refinitiv data, the median price target surged from $56 on August 1 to $68 on Friday.
Among the more bullish projections, Wells Fargo raised its target to $75 from $65, while Citigroup increased its target to $70 from $60. JPMorgan also revised its target price upward to $68 from $61, further underlining the growing confidence in Dell’s potential to thrive in the AI-driven landscape.
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