Dell (DELL) shares experienced a downturn today, even as analysts expressed confidence in the company’s prospects within the artificial intelligence sector. Following mixed financial results for the fourth quarter of 2024 and disappointing forward guidance, Dell’s stock price declined significantly. The stock closed down almost 7% yesterday and showed a similar decrease in pre-market trading.
Despite these challenges, several analysts maintain a positive outlook. Vijay Rakesh, a four-star TipRanks-rated analyst from Mizuho Securities, reiterated his Buy rating on the stock, setting a price target of $140, slightly down from a previous target of $150. Rakesh emphasized Dell’s strong pipeline of AI-related projects as a key driver for future growth, even though the company reported a 53% quarter-over-quarter decrease in AI server orders. Dell’s AI servers incorporate Nvidia (NVDA) microchips, along with processors, and other technologies like those used by Elon Musk’s xAI.
Rakesh stated that Dell is “well-positioned” in the AI server market, with a substantial AI pipeline valued between $27 billion and $35 billion. “We see Dell as a leader in enterprise AI,” the analyst said. In addition, he pointed to the company’s commercial personal computer refresh and plans to increase its stock buyback program by $10 billion.
Aaron Rakers, a five-star TipRanks-rated analyst at Wells Fargo, also maintained a Buy rating for Dell. He lowered his price target to $150 from $160, highlighting Dell’s economies of scale, its PC refresh cycle, its substantial free cash flow, and the aforementioned buyback plans.
Is DELL a Good Stock to Buy?
According to TipRanks, DELL receives a Strong Buy consensus rating, based on 13 Buy recommendations and only 1 Hold rating. The highest price target currently stands at $185, while the consensus price target for DELL stock is $145.49, suggesting an upside potential of 34.93%.
