Dell Technologies (NYSE: $DELL) is a multinational computer technology company that develops, sells, repairs, and supports personal computers, software, and related services. Headquartered in Round Rock, Texas, Dell offers infrastructure solutions, data center hardware, virtualization software, cloud services, servers, network switches, and cybersecurity services worldwide under the Dell, Dell EMC, VMware, and Pivotal brands.
On Wednesday, Dell Technologies’ stock surged after Morgan Stanley raised its price target on the tech giant. The investment bank cited strong demand for its AI servers and improving market conditions, now seeing Dell as a “top pick” in the sector.
Morgan Stanley Bullish on Dell Technologies
In a note to investors, Morgan Stanley analyst Erik Woodring increased the firm’s price target on Dell from $128 to $152, reflecting a bullish outlook on the company’s prospects. According to Woodring, Dell is benefiting from a surge in AI server sales, an inflection in storage demand, and a recovering PC market.
“Over the course of the last 4 weeks, our customer, industry, and supply chain checks have pointed to an inflection in momentum at DELL,” Woodring wrote. He highlighted Dell’s competitive gains in the Tier 2 cloud service provider (CSP) domain for AI servers and a noticeable rise in enterprise AI server acquisitions.
Dell Technologies has announced its most aggressive forward-spending strategy in over six years, indicating strong confidence in its growth prospects. Morgan Stanley projects Dell’s earnings per share (EPS) to exceed $8 for fiscal year 2025, well above the consensus estimate of $7.55. For fiscal 2026, the firm anticipates EPS to reach $10.12, up from the previous estimate of $9.11, representing a nearly 20% increase over the consensus estimate.
Dell Technologies (DELL) Stock Performance
Dell’s stock has been on a remarkable run, with shares rising 9.91% to $147.41 on May 15, 2024, potentially setting a new record closing high. This surge puts Dell on track to achieve a market capitalization of $103.8 billion, marking the first time it has surpassed the $100 billion mark since its return to the public market in 2018.
Over the past year, Dell stock has climbed to 217.95% and rose 90.56% year-to-date. Currently, the stock is trading higher than the 50-day and 200-day Moving Averages, with a P/E ratio of 30.68 and a PEG ratio of 1.66. As of April 30, 2024, Dell had 6.93 million shares held short, which led to a short ratio of 0.86 and a short percentage of float of 2.30%.
Recent Earnings and Outlook
In its most recent quarterly results on February 29, Dell Technologies reported earnings per share of $2.20, beating analysts’ consensus estimates of $1.73 by $0.47. Revenue for the quarter came in at $22.32 billion, slightly above expectations of $22.17 billion. However, revenue was down 10.9% year-over-year.
Furthermore, Dell is slated to report fiscal first-quarter results on May 30. Analysts expect the company to earn $1.21 per share on revenue of $21.65 billion.
Data Breach Incident
Despite the positive momentum, Dell Technologies recently confirmed it is investigating a data breach involving customers’ names, physical addresses, and certain hardware and order information. The company stated that the incident did not involve financial or payment information, email addresses, telephone numbers, or highly sensitive customer data.
In a statement, Dell said it promptly implemented incident response procedures, applied containment measures, and notified law enforcement. The company is working with external forensic specialists to investigate and monitor the situation.
“Although we don’t believe there is significant risk to our customers given the type of information involved, we are taking proactive steps to notify them as appropriate,” Dell stated. Security experts have warned Dell customers to be vigilant against potential phishing attempts or targeted attacks using the stolen information.
Should You Consider Investing in DELL Stock?
DELL stock has surged despite a recent data breach incident fueled by a high demand for its AI servers, overall favorable market conditions, and a recent deal with CrowdStrike. Morgan Stanley provided a positive forecast and raised the price target, pointing to Dell Technologies’ competition in the cloud service provider sector and rapid AI server acquisitions by enterprises. The AI boom is upward, and Dell is firmly ahead of the curve.
However, the company must address security concerns and maintain customer trust while delivering on its ambitious growth strategy in the highly competitive tech sector. As it navigates these challenges, Dell’s ability to execute and sustain momentum will be crucial for continued success.
Click Here for Updates on Dell – It’s FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.
