Shares of tech company Dell (DELL) are up on Monday after Bank of America reiterated its Buy rating on the stock. This came after Nvidia (NVDA) mentioned Dell in a positive light during its GTC event last week. Five-star analyst Wamsi Mohan said that supplier checks in Asia point to strong demand in the second quarter for Nvidia’s new GB200 systems, and it looks like Dell is gaining market share. Mohan also kept his $150 price target on the stock.
Interestingly, the analyst added that Dell will likely take advantage of the current market by being more strategic with its stock buybacks. And there is good reason to think that this will be the case. In fact, the image below shows what appears to be a choppy buyback trend, which indicates that the company has been opportunistic when it comes to share repurchases.
In addition, CEO Michael Dell noted that the company has been able to grow its earnings and generate strong cash flow through multiple economic cycles, which, according to Mohan, should give investors confidence in its ability to weather any headwinds.
It is also worth noting that although AI servers currently have lower profit margins, they are still contributing to Dell’s overall revenue growth. Indeed, at the GTC event, Dell showed off its PowerEdge XE8712 server, which was introduced as the first server in the world to support Nvidia’s upcoming GB300 chip. Mohan said that this is another example of how Dell continues to increase its presence in the fast-growing AI market.
Is DELL Stock a Good Buy Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DELL stock based on 12 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average DELL price target of $137.36 per share implies 37.15% upside potential.
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