Dell Technologies Achieves Record Highs Driven by AI Adoption

Source: reuters.com

Dell Technologies experienced a remarkable surge, with its shares soaring by 25% to reach an all-time high on Friday. This surge follows a positive annual forecast, indicating that the technology equipment manufacturer is capitalizing on the flourishing AI landscape.

With the stock peaking at $118.8, the company is poised to gain a staggering $17.7 billion in market value, marking its most impressive intra-day performance to date. This surge underscores the profound impact of increasing AI adoption on enterprise technology vendors.

Jeff Clarke, the company’s COO, emphasized Dell’s strong positioning in AI during a recent statement, noting a growing demand from customers for PCs and servers equipped with AI capabilities. Clarke revealed that orders for Dell’s AI-optimized servers, particularly the flagship PowerEdge XE9680, surged by 40% sequentially in the fourth quarter.

Following these promising results, at least nine brokerages have raised their price targets on Dell. Presently, more than three-fourths of analysts maintain a “buy” or higher rating, with a median target price of $113.

Trading activity has also soared, with over 31 million Dell shares changing hands as of 10:40 a.m. Eastern time, exceeding the stock’s 30-day average trading volume by over seven times.

This recent upturn in Dell’s business trajectory contrasts with its struggles over the past two years, particularly amidst a sharp decline in global computer sales. While fourth-quarter revenue declined less than anticipated, annual revenue saw its first drop since the company’s re-listing in 2018.

Looking ahead, Dell forecasts revenue between $91 billion and $95 billion for the current fiscal year ending January 2025, significantly surpassing analysts’ average estimate of $92.07 billion.