After raising full-year financial estimates with help from artificial intelligence (AI) and stabilising demand for computer gear after a months-long decline, Dell Technologies Inc. (DELL.N) shares increased 22.2% and reached a record high on Friday.
The stock last changed hands at $68.75 after reaching a high of $70.28 on 5.4 times its 10-day moving average of trading activity. Dell has increased by more than 70% so far this year, which would be a record for the company.
The better order patterns in the larger enterprise vertical were “corroborated by results and guidance,” according to JPMorgan analyst Samik Chatterjee.
According to the analyst, Dell supplemented evidence of this tendency from CDW Group (CDW.O), Cisco Systems (CSCO.O), and Hewlett Packard Enterprises (HPE.N).
Dell reported revenue and EPS for the second quarter that were higher than expected. Due to increased demand for AI-optimized servers, servers and networking revenue increased 11% from the first quarter to $4.27 billion, according to Dell.
Although JPMorgan’s Chatterjee did not consider AI to be a major factor, the analyst nonetheless stated in a report that “it is helping in the visibility of a recovery with Dell highlighting that 20% of AI orders (in revenues) were for AI-based servers.”
After the release, at least 10 analysts increased their price targets for Dell’s shares, with several citing its position to profit from AI, including Credit Suisse and Evercore ISI.
According to Refinitiv data, the median price target jumped from $56 on August 1 to $68 on Friday.
Wells Fargo and Citigroup both raised their target prices from $60 to $75 as part of the bullisher outlooks. JPMorgan increased their goal from $61 to $68.