Written by Yuvraj Malik
(Reuters) – Dell Technologies jumped 25% on Friday to a record high after an upbeat annual forecast that showed the company also benefited from the AI boom.
The stock price rose to $118.8, increasing the company's market value by $17.7 billion and putting it on track for its best intraday performance.
This surge provides further evidence that increased AI adoption is driving profits across enterprise technology vendors, adding to Wall Street's enthusiasm following NVIDIA's stunning rally.
“We are well-positioned in the AI space,” Chief Operating Officer Jeff Clark said Thursday, noting that more customers are looking for PCs and servers with AI capabilities.
Clark said orders for the company's AI-optimized servers, including its flagship PowerEdge XE9680, grew 40% sequentially in the fourth quarter.
At least nine securities companies raised their price targets for Dell following the results. More than three-quarters of analysts currently rate the stock at “buy” or higher, with a median price target of $113.
Bernstein analysts said, “Dell's AI business showed strong progress across key metrics…Comments about the PC market were similar to HP's: a recovery is coming but delayed into the second half of the year.'' ” he said.
Sales at PC and enterprise technology vendor HP have declined for seven consecutive quarters over the past three months.
The recent turnaround in business comes after Dell struggled for much of the past two years as computer sales around the world plummeted. Although fourth-quarter sales were lower than expected, annual sales declined for the first time since relisting in 2018.
Dell expects sales of $91 billion to $95 billion for the current fiscal year, which ends in January 2025, significantly higher than the average analyst estimate of $92.07 billion.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Sriraj Kaluvila)