The shares of Dell Technologies jumped a record 25% on Friday propelled by optimistic projections foreseeing an upswing in the demand for information technology equipment to capitalize on the flourishing artificial intelligence (AI) trend.
The market boost will help to add another $17.7 billion to Dell’s market value as it climbed to $118.8 on Friday. The rally confirms the optimistic market sentiment around the increasing adoption of AI, which is becoming a catalyst for growth among vendors in enterprise technology.
The fresh boom for Dell Technologies came days after Nvidia added a whopping $277 billion to its market capitalization in a single day, becoming the fourth biggest company in the world. The tech giant’s stock rallied 17% on the backs of strong 233% growth in current-quarter revenue and booming AI market.
“We have positioned ourselves well in AI,” Dell COO Jeff Clarke told Reuters and added that the demand for PCs with AI capabilities is increasing. In the fourth quarter, there was a sequential increase of 40% in orders for the company’s servers tailored for artificial intelligence, which includes the prominently featured PowerEdge XE9680, Jeff Clarke said.
The surge for Dell Technologies came after two difficult years as globally the demand for computers plunged to record low levels. The company posted better-than-expected revenues during the fourth quarter, but its annual revenue dropped for the first time since 2018 re-listing.
Brokerages raise their price targets on Dell
As per Reuters, over 9 brokerages raised their price targets on Dell, and presently, more than 75% of analysts advocate a “buy” or a more optimistic rating, with a median target price of $113.
“Dell’s AI business showed strong progress on key metrics… commentary on the PC market was similar to HP’s: that a rebound is coming, but it is being pushed out to the second half of the year,” said analysts at Bernstein.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 01 Mar 2024, 09:59 PM IST