Dell Technologies: Strong Growth Potential and AI Momentum Justify Buy Rating

Bank of America Securities analyst Wamsi Mohan reiterated a Buy rating on Dell Technologies today and set a price target of $163.00.

Wamsi Mohan has given his Buy rating due to a combination of factors that highlight Dell Technologies’ strong position and growth potential. The company is effectively managing challenges in the memory market and is expected to achieve a long-term earnings per share growth of 15% over the next five years. Dell’s management has demonstrated confidence in their strategies, including leveraging long-term supplier relationships, demand shaping, and operational cost reductions, to sustain this growth.
Furthermore, Dell is capitalizing on the momentum in artificial intelligence, with significant revenue growth in AI servers and a robust pipeline. The company has raised its AI server revenue guidance, reflecting strong demand and strategic project funding. Despite AI servers currently being margin dilutive, profitability is expected to improve as revenues scale. Additionally, Dell is maintaining its client solutions group margins despite memory cost pressures, showcasing its resilience and operational efficiency. These factors contribute to the attractive valuation of Dell’s shares, supporting the Buy recommendation.

According to TipRanks, Mohan is a 5-star analyst with an average return of 18.4% and a 60.94% success rate. Mohan covers the Technology sector, focusing on stocks such as Apple, Dell Technologies, and HP.

In another report released yesterday, Mizuho Securities also reiterated a Buy rating on the stock with a $175.00 price target.