Dell shares surged over 8% on Wednesday, extending a 3.5% gain from the previous session, after the server manufacturer significantly raised its long-term financial outlook.
During an investor event on Tuesday, Dell announced it now expects annual revenue to grow 7% to 9% through its 2030 fiscal year, a substantial increase from its prior range of 3% to 4%. The company also projected that adjusted earnings per share will grow by 15% or more annually over the same period, nearly doubling its previous estimate of 8%.
Company executives attributed the optimistic forecast to rising corporate capital expenditures on artificial intelligence infrastructure. Dell is a key provider of this technology, including servers equipped with Nvidia’s latest graphics processing units (GPUs).
“Hardware is cool again, and we are uniquely positioned, providing opportunities to grow across both data center infrastructure and AI PCs,” said founder and CEO Michael Dell.
In response to the announcement, Wall Street analysts at firms including TD Cowen, JPMorgan, and Bank of America raised their price targets on Dell stock, citing the company’s AI momentum.
However, the recent wave of AI spending is facing scrutiny. Analysts are debating whether firms like OpenAI can fulfill infrastructure commitments valued at hundreds of billions of dollars. Concerns about circularity in AI investments have fueled fears of a potential bubble, while a recent report on Oracle’s cloud business margins has called the long-term profitability of renting AI servers into question.
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