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Dell stock target lifted at BofA on AI momentum; shares rally

Bank of America raised its price target for Dell Technologies Inc. (NYSE:DELL) from $130 to $180, driven by strong AI momentum and new product launches unveiled at Dell Technologies World 2024.

The target increase and comments from BofA helped lift Dell’s shares by more than 2% on Wednesday.

The bank’s analysts reiterated their «Buy» rating on Dell, citing a positive outlook for the company heading into the fiscal second quarter of 2025.

Key factors include robust demand for AI servers, storage driven by an IBM (NYSE:IBM) mainframe refresh, and an expected PC refresh. During the recent Dell Technologies World event, the company introduced Dell AI Factory and expanded its AI portfolio with five new AI-enabled PCs, all-flash file storage, network architecture, and AI services offerings.

The bank sees these innovations supporting Dell’s growth in the coming year.

In the first quarter, Dell reported shipping $800 million worth of AI servers, with backlog doubling quarter-over-quarter to $2.9 billion and order growth of 40%. BofA expects AI server revenue to reach $1.4 billion this quarter, with backlog potentially growing to $4-5 billion.

BofA adjusted its fiscal 2025 revenue and EPS estimates to $92.9 billion and $7.84, respectively, reflecting confidence in the upside of AI demand.

The firm also noted that Dell, which it feels «remains under-owned and underweighted,» could benefit from AI-related growth and potential inclusion in the S&P 500.

This bullish outlook underscores Dell’s strategic positioning to capitalize on the expanding AI market, reinforcing its long-term growth prospects.

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