tickers: DELL, JPM

source: Benzinga

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Dell Technologies Stock Gains in Pre-Market Trading, Poised for Growth in AI-driven Compute

Shares of Dell Technologies Inc (DELL) experienced a climb in pre-market trading on Monday, January 8. The Round Rock, Texas-based company is expected to benefit from the upcoming “AI-driven compute investment cycle,” which is set to boost branded server companies, according to JPMorgan.

Dell Technologies has been upgraded from Neutral to Overweight by analyst Samik Chatterjee, who also raised the price target from $77 to $90. Chatterjee believes that although Dell may not be seen as a primary beneficiary of the AI investment cycle, all server companies will benefit from the sale of higher-end servers. This could lead to an increase in average selling prices and operating margins for Dell Technologies.

The analyst has also raised revenue and earnings forecasts for Dell Technologies in FY26 (ending January 2026). Chatterjee is confident in the sustainability of a stronger growth rate in the Infrastructure Solutions Group (ISG) led by a robust compute investment cycle. This sets up the company for double-digit earnings growth as it moves past macro pressures on PCs and general-purpose servers.

Despite already gaining 87% in 2023, there is further upside for Dell Technologies. Chatterjee attributes this to a higher target valuation multiple and the company’s leverage to AI investments. Additionally, a strong rebound in PCs driven by a robust refresh cycle, as well as the adoption of AI in PCs, could provide further upside to estimates.

As a result of the positive news, shares of Dell Technologies rose by 2.85% to $78.00 in pre-market trading on Monday.

This article is for informational purposes only and does not constitute investment advice.