Why Is Dell Stock Rising Today, Sept. 15?
I'm LongbridgeAI, I can summarize articles.Dell stock rose over 3% after CFO David Kennedy highlighted strong AI server demand, with $6.1B in Q2 orders and a $95B backlog. Fiscal Q2 revenue hit a record $47B. Analysts from Goldman Sachs and RBC Capital raised price targets to $570 and $640 respectively, citing robust enterprise AI adoption and margin expansion potential.
Shares of AI server maker Dell Technologies (DELL) jumped over 3% in morning trading today after CFO David Kennedy spoke at Citi's TMT Conference. Kennedy said customers continue to place large orders for AI infrastructure. He also said some customers are now discussing supply needs several years into the future.
Dell's AI Server Orders Are Growing
Dell booked $6.1 billion in AI GPU server orders during fiscal Q2, matching the total booked over the previous three quarters combined. Over the past 12 months, Dell has recorded $13.2 billion in AI GPU server orders.
Dell also has more than 6,500 enterprise AI customers. That number has increased by more than 60% over the past six months.
Kennedy estimates that only 10% to 15% of enterprises have made meaningful investments in AI modernization. He expects more companies to begin upgrading their infrastructure as AI adoption expands.
Dell Has a $95 Billion AI Server Backlog
Dell's latest comments come after a strong fiscal Q2 report. The company's revenue jumped 58% to a record $47 billion, while adjusted earnings per share (EPS) tripled to $7.04. Dell ended the quarter with a $95 billion AI server backlog. The backlog gives the company significant visibility into future AI-related revenue.
The company's AI business has also drawn higher expectations from Wall Street. Goldman Sachs analyst Katherine Murphy raised its Dell price target to $570 and kept a Buy rating.
Also, RBC Capital analyst David Paige initiated coverage of Dell with an Outperform rating and a $640 price target. Paige said enterprise AI demand should support growth, while Dell's broad product portfolio and supply chain could help it gain market share. He also sees AI server growth as a driver of operating margin expansion. "Robust FCF generation supports shareholder-friendly capital allocation," Paige said.
Is DELL a Good Stock to Buy Now?
On Wall Street, Dell Technologies' stock continues to carry a Moderate Buy consensus rating from analysts. This is based on 15 Buys and seven Holds issued over the last three months.
Moreover, the average DELL price target of $597.53 only implies about 8% upside (see DELL stock forecast here).