BofA raised its price target for Dell Technologies (NYSE:DELL) to $98 from $82 per share in a note Friday, maintaining a Buy rating on the stock.
Analysts at the bank, ahead of the company's earnings release on February 29, noted that Dell recently reported strong data center revenues and spoke of strong AI-related demand, which should sustain for years.
"For DELL, we see continued momentum in the server business and expect orders continued to grow in F4Q," said BofA. "Given its focus on enterprise vs hyperscale, Dell should see strong demand as companies start fine tuning trained AI models and then ramp inferencing with those models."
Furthermore, analysts believe that even though the overall PC market recovery is slower than they had originally anticipated, DELL should benefit in the second half of this year from the launch of AI-enabled PCs.
"AI tailwinds, and improving FCF benefiting from negative cash conversion cycle as PC revenue continues to grow," added the firm.