Shares in Dell Technologies (NYSE:DELL) rose 2.7% ahead of the market open on Wednesday after Morgan Stanley analysts reiterated the company as their top pick and lifted their 12-month price target on the stock.
The price objective was increased from $128 to $152, implying a roughly 13% upside from the last closing price.
“Even after a >100% move in the T12M, DELL trades at just 13x our new FY26 EPS of $10.12 (18% above Street) & remains the best way to play 1) building AI server momentum, 2) inflecting storage demand, and 3) an improving PC mkt,” analysts said in a note.
Morgan Stanley analysts note an inflection in momentum at DELL over the past four weeks, driven by competitive Tier 2 CSP AI server wins, additional enterprise AI server orders, and increased storage demand.
As a result, the tech company now has the strongest forward spending intentions in over six years, analysts highlighted.
Even accounting for the high AI server build targets from the supply chain, analysts project earnings of just over $8 per share in FY25, compared to the consensus of $7.55, and $10.12 in FY26, up from the previous $9.11 estimate.
For the April quarter, they expect Dell to guide up EPS and highlight continued quarter-over-quarter AI server backlog growth.
“We believe the big tier 2 CSP win referenced above could equate to a $2B order this quarter, which means AI backlog at the end of the April quarter would be just under $4B, and potentially higher taking into account smaller enterprise wins, barring any material changes in rev rec in the April quarter,” analysts noted.