Why Dell Stock Climbed to a New All-Time High This Week
Key Points
Agentic AI is boosting sales of Dell's computer servers.
RBC Capital Markets sees more gains ahead for Dell's stock owners.
- 10 stocks we like better than Dell Technologies ›
Shares of Dell (NYSE: DELL) jumped over 8% this past week after analysts highlighted the computer maker's strong artificial intelligence (AI)-fueled expansion prospects.
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AI is a boon for Dell
Dell's revenue leaped 58% year over year to $47 billion in its most recent quarter. Its adjusted earnings per share, in turn, rocketed 203% to $7.04.
Rising interest in agentic AI is driving demand for both GPU- and CPU-based computing infrastructure. Sales of the tech giant's AI-optimized servers surged 100% to $16.4 billion, while revenue in its traditional servers and networking segment soared 122% to $10.5 billion.
RBC Capital Markets analyst David Paige sees more gains ahead for Dell, driven by rising IT spending from businesses and governments alike.
"With no signs of slowing, we believe Dell continues to be well-positioned to benefit from a multi-year AI infrastructure spending cycle," Paige said.
Paige also noted that Dell's well-constructed production network gives it an edge over its rivals, many of whom are struggling to obtain the processor and memory chips they need due to manufacturing bottlenecks.
"Dell's best-in-class supply chain represents a competitive moat that differentiates the company during periods of supply disruption," Paige said.
In turn, Paige assigned an outperform rating and a $640 price forecast on Dell's stock. His new price target represents potential gains of roughly 13% from the stock's closing price on Friday.
All's clear, for now
The major risk for Dell's shareholders is a slowdown in AI-related infrastructure spending, which would likely prompt investors to take some gains off the table. But as long as companies' earnings announcements and analyst reports suggest the AI boom is set to continue, Dell's share price could keep setting new highs.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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