Dell Technologies’ stock surged 25% over the past week, continuing its climb with a 7% increase on Thursday. This uptick is fueled by analysts’ positive outlook on the company’s potential to benefit from the growing artificial intelligence (AI) sector. Currently, more than three-quarters of analysts tracked by Visible Alpha have given Dell a “buy” rating, with a consensus target price of $152.44, suggesting over 38% upside from Thursday’s closing price of $110.21.
J.P. Morgan analysts, who recently added Dell to their “Analyst Focus List,” have raised their price target for the stock to $160 from $155. They highlighted Dell’s potential for AI-related gains and described the current stock price as an “attractive entry point” after a recent pullback.
This surge comes despite a significant drop in Dell’s shares in May, following disappointing first-quarter results that showed a double-digit decline in operating income. Concerns over margin pressures and competition in the AI server market had previously weighed on the stock. However, analysts believe that the AI server market is still in its early stages, positioning Dell for potential long-term growth.
To improve margins, Dell may need to accelerate cost-cutting measures similar to strategies adopted by peers like Intel and Cisco. The company is scheduled to report its second-quarter earnings on August 29, which will be closely watched for indications of margin improvements.
Overall, while challenges remain, analysts are optimistic about Dell’s ability to capitalize on the AI boom and are closely monitoring the company’s financial performance and strategic adjustments.
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