Dell Could Experience Massive Growth if This Prediction From Jensen Huang Proves to Be True

Computer maker Dell Technologies (NYSE: DELL) has been generating a lot of growth lately from artificial intelligence (AI), with servers optimized for AI being in high demand. It's become a huge growth opportunity for the company, and it comes at a critical time when its computer sales haven't exactly been taking off.

However, there could be yet another promising and underrated growth opportunity for Dell in the near future. Nvidia CEO Jensen Huang recently made a prediction, which, if true, could light a fire under Dell's computer business in the future, and it's to do with agentic AI.

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Billions of agents could be in need of computers

A big concern related to AI is that agents may take jobs and diminish the need for human workers. How that all plays out remains a question mark, but what is clear is that agents could play a crucial role in the economy's future growth by speeding up work and freeing people from repetitive day-to-day tasks. Huang predicted, on his company's recent earnings call, that there will be billions of agents in the future. And those agents are going to require similar tools to those that humans use right now, including computers.

For Dell, this could position it for yet another way to benefit from AI-related growth. Not only does it provide the servers and infrastructure needed to create AI models, but it may also provide the computers that agents may end up needing to run tasks and devote valuable computing resources toward. In its most recent fiscal year, which ended on Jan. 30, Dell's infrastructure solutions group generated 40% revenue growth, while the client solutions group saw only 5% growth. With the rise in AI agents, however, there could be much greater growth on the client side of its business.

Why Dell's stock can still soar much higher

In just the past 12 months, Dell's stock has risen by more than 160%, with it now being at an all-time high. However, the stock trades at a forward price-to-earnings (P/E) multiple of 23 (based on analyst estimates), which is still not terribly expensive. By comparison, the S&P 500 averages a forward P/E multiple of 22. And when you take into account the potential growth opportunities from agentic AI, a significantly higher premium for Dell's stock may be more than justified.

As a leading and trusted brand in tech, Dell is a stock that can be among the biggest winners due to AI, and it can be a great buy for the long haul.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.