Dell shares have experienced a significant rise of over 9% to an all-time high following Morgan Stanley’s bullish outlook on the company. Analyst Erik Woodring from Morgan Stanley raised the price target on Dell and highlighted the increasing momentum in the AI server business as a key driver for the stock’s growth.
Woodring upgraded Dell’s price target from $128 per share to $152 per share and labeled the company as a top pick in the market. He emphasized the growing demand for AI servers and forecasted approximately $10 billion of AI server revenue for Dell by the end of fiscal 2025.
The AI server market is witnessing a surge in demand, particularly for servers powered by Nvidia’s chips. These chips are essential for building and deploying advanced AI models used by tech giants like Google, OpenAI, and Meta. Dell, leveraging the latest Nvidia AI chips such as the H100 GPU, is well-positioned to capitalize on this trend.
Nvidia’s CEO, Jensen Huang, highlighted Dell’s expertise in building large-scale AI systems during Nvidia’s annual conference. Huang directed customers seeking the latest AI chips to Dell, showcasing the strong partnership between the two companies in the AI server space.
Woodring expressed confidence in Dell’s business outlook, citing factors such as increasing demand for AI servers and the potential for upselling additional hardware like data storage. Dell’s upcoming earnings announcement and partnerships with tech leaders like Nvidia signal a positive trajectory for the company.
Apart from AI servers, Dell’s business of building PCs for consumers and businesses running Microsoft Windows is poised for growth. The anticipated unveiling of new AI features by Microsoft is expected to drive demand for new PCs, benefiting Dell’s PC segment. Despite a previous slump in PC sales, the industry is regaining momentum and exceeding expectations, which bodes well for Dell’s future performance.
Dell’s strategic focus on AI servers, strong partnerships with key industry players like Nvidia, and the potential resurgence in the PC market position the company for continued success. As technological advancements drive demand for cutting-edge solutions, Dell’s innovative approach and market positioning are likely to propel its growth in the ever-evolving tech landscape.
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