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Shares of Dell (DELL) rose more than 8% on Wednesday, adding to their 3.5% gain in the previous trading session as the server maker improved its long-term financial outlook.
Dell said at an investor event Tuesday that it expects revenue to grow 7% to 9% annually in its 2030 fiscal year, up from its previous range of 3% to 4%. The company expects adjusted earnings per share to grow 15% or more annually during this period, up from its previous estimate of 8% growth.
Dell executives highlighted companies’ growing capital spending on AI as they invest in infrastructure to power the technology. This infrastructure includes Dell servers equipped with the latest GPUs (graphics processing units) or Nvidia AI (NVDA) chips.
“Hardware is cool again and we are uniquely positioned, providing growth opportunities in both data center infrastructure and AI PCs,” said Michael Dell, the company’s founder and CEO.
Wall Street analysts from firms including TD Cowen, JPMorgan (JPM) and Bank of America (BAC) have raised their price targets on Dell shares, citing AI dynamics.
Certainly, the recent flurry of AI spending is being scrutinized, as analysts question whether companies — namely OpenAI (OPAI.PVT) — can live up to their hundreds of billions of dollars in AI infrastructure commitments. At the same time, concerns over the circularity of AI investments have fueled fears of an AI bubble, while the long-term financial gains from leasing AI servers have been called into question due to a new report on the margins of Oracle’s cloud business.
