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Dell Stock Gets an Upgrade as Demand Gets Stronger

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Daiwa analyst Louis Miscioscia has a price target of $80 for Dell.

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Dell Technologies stock was rising Tuesday after a Daiwa Capital Markets analyst raised his rating on the computer maker, citing improving demand.

Analyst Louis Miscioscia upgraded shares of Dell (ticker: DELL) to Outperform from Neutral and increased his price target to $80 from $50. The new call implies a gain of 16% from the stock’s closing price on Monday.

“The demand slowdown since 2HCY22 seems to be abating,” Miscioscia said a research note Monday. “Two new big positives are macro tech demand improving and AI sales ramping, both aid long term growth 辫辞迟别苍迟颈补濒蝉.”

Covid-19 boosted demand for personal computers as people worked and took classes from home. But that demand surge eventually receded, hitting many computer and chip manufacturers.

A report from the market research firm IDC on Aug. 28 raised hope for better times, saying that while consumer demand is in a tough spot given stubbornly high inflation, PC shipments are forecast to grow 3.7% year over year in 2024.

“Commercial PC demand improved sequentially and as we moved through the quarter,” Chief Operating Officer Jeffrey Clarke said on Dell’s latest earnings call in August.

Miscioscia also said he finds it encouraging that Dell is seeing significant demand for its artificial-intelligence solutions, specifically the PowerEdge 9680 server.

“We?saw?server?ASPs?[average selling prices] continued to expand and our AI service mix of server revenue demand continued to increase given the recent rise in customer interest in generative AI solutions,” Chief Financial Officer Yvonne McGill said on the earnings call.

Shares of Dell were 1.1% higher at $69.89 on Tuesday. The stock has jumped 74% this year.

Write to Angela Palumbo at [email protected]