Barclays Upgrades Dell Technologies on Strong AI Server Growth and Positive Outlook
Brief news summary
Barclays has upgraded Dell Technologies to overweight from equal weight, citing the company’s strong position in the artificial intelligence (AI) server market as a key growth driver. With a $148 price target, the analyst firm anticipates roughly 25% upside from recent closing prices. Analyst Tim Long highlighted Dell’s robust AI server orders, stable AI operating margins, expanding enterprise server and storage opportunities, and disciplined operational expense management. Dell plans to ship about $9.4 billion worth of AI servers in Q4, totaling $25 billion for the full year. Barclays projects Dell’s AI server business to grow approximately 155% over the next two years, supporting expected margin expansion. Earnings per share are forecasted to rise by 20% by 2027. This bullish outlook aligns with broader Wall Street sentiment, with 19 of 26 analysts rating Dell a buy or strong buy. Over the past year, Dell’s stock has gained nearly 9%.According to Barclays, Dell Technologies’ artificial intelligence server business is set to push its shares higher. The bank upgraded the PC and server stock from equal weight to overweight, while maintaining its $148 price target, which suggests around 25% upside from Wednesday’s closing price. Analyst Tim Long highlighted in a client note that they are increasingly positive on Dell due to strong AI server orders, stable AI operating margins, growing opportunities in enterprise server and storage, and Dell’s consistently disciplined operating expense management. Dell plans to ship approximately $9. 4 billion in AI servers during the fourth quarter, bringing total shipments for the year to $25 billion. While gross margin is expected to remain in the high single digits, Long noted this is generally anticipated, and that the company is managing to mid-single-digit operating margins for the business.
Barclays projects Dell’s AI server segment to grow about 155% over the next two years. Additionally, the hardware firm is expected to improve margins thanks to effective operational expense control. Consequently, analysts forecast a 20% increase in Dell’s earnings per share by 2027. Barclays’ outlook aligns with Wall Street consensus; among 26 analysts covering the stock, 19 have buy or strong buy ratings, according to LSEG data. Over the past year, Dell’s stock has risen nearly 9%.
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