Dell Technologies Soars 2% Pre-Market as JPMorgan Names it Top Pick for Long-Term Growth in AI Server Market and Traditional Infrastructure
In a bold move, JPMorgan analysts have named Dell Technologies (NYSE:) as their new top pick, sending shares up over 2% premarket on Thursday. The analysts highlighted Dell's potential for significant long-term growth, particularly in the AI server market and traditional infrastructure.
Reaffirming their Overweight rating on Dell, JPMorgan set a new price target of $160 by December 2025 and added the stock to its Analyst Focus List as a value pick. The analysts believe that Dell shares have been underperforming compared to other AI-related stocks and the broader market, partly due to concerns about margin pressures in the AI server market, which they believe are overblown.
According to JPMorgan, the AI server revenue opportunity remains large, with estimates for the total addressable market likely to increase as cloud capital expenditure forecasts are revised higher. As customer adoption drives revenue growth, profit margins are expected to expand, especially with a shift towards smaller cloud and enterprise companies dominating AI server purchases post-2026.
In addition to AI servers, JPMorgan sees strong prospects for Dell in traditional infrastructure and enterprise storage markets, highlighting significant revenue and margin opportunities. While AI PCs may not be a major market driver yet, the investment bank believes they could contribute to near-term revenue growth through increased volumes and pricing.
Looking ahead, JPMorgan estimates Dell's earnings power to reach around $11 per share in FY27, supported by growth in traditional infrastructure and AI servers, operational savings, and share buybacks. With a valuation multiple of around 15x justified by this earnings potential, higher than peers like Cisco (NASDAQ:) and NetApp (NASDAQ:), JPMorgan maintains a bullish outlook on Dell's stock.
Analysis:
Overall, JPMorgan's endorsement of Dell Technologies as a top pick for long-term growth in the AI server market and traditional infrastructure has boosted investor confidence, leading to a rise in share prices. The bank's positive outlook on Dell's revenue and profit margins, fueled by increased customer adoption and market trends, suggests a promising future for the company. For investors looking to capitalize on the potential growth opportunities in the tech sector, Dell Technologies may present a compelling investment opportunity.