Dell (DELL) stock rose more than 8% on Wednesday, adding to its 3.5% gain during the previous trading session, as the server maker improved its long-term financial outlook.
Dell said during an investor event Tuesday that it expects revenue to grow between 7% and 9% annually through its fiscal 2030, up from its previous range of between 3% and 4%. The company forecast that adjusted earnings per share will grow 15% or more annually over that period, up from its previous growth estimate of 8%.
Dell executives pointed to increasing capital spending by companies on AI as they invest in infrastructure to drive the technology. That infrastructure includes Dell servers with the latest GPUs (graphics processing units) or artificial intelligence chips from Nvidia (NVDA).
“Hardware is back in fashion and we are in a unique position, providing opportunities for growth in both data center infrastructure and AI-enabled PCs,” said company founder and CEO Michael Dell.
Wall Street analysts at companies including TD Cowen, JPMorgan (JPM) and Bank of America (BAC) raised their price targets for Dell stock, citing the AI ​​boost.
The recent wave of AI spending is certainly coming under scrutiny, as analysts debate whether companies, specifically OpenAI (OPAI.PVT), can meet their hundreds of billions of dollars in AI infrastructure commitments. At the same time, concerns about circularity in AI investments have fueled new fears of an AI bubble, while the long-term financial gains from leasing AI servers have been called into question due to a new report on the margins of Oracle’s cloud business.