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.