Dell stock price target raised to $170 from $160 at Mizuho on AI growth

Investing.com - Mizuho raised its price target on Dell (NYSE:DELL) to $170 from $160 on Wednesday, while maintaining an Outperform rating following the company’s Analyst Day in New York City. The stock, currently trading at $150.87, sits near its 52-week high of $154.70, reflecting strong momentum with a remarkable 110% return over the past six months, according to InvestingPro data.

The investment firm cited Dell’s strong artificial intelligence momentum in Enterprise and Sovereign AI segments, with robust demand signals expected over the next 12-18 months. This strategic focus has helped Dell maintain its position as a prominent player in the Technology Hardware, Storage & Peripherals industry, with the company generating over $101 billion in revenue over the last twelve months.

Dell raised its financial targets for fiscal years 2026-2030, projecting 7-9% revenue compound annual growth rate (CAGR), with earnings per share increasing 15% year-over-year and approximately 80% free cash flow return.

The company’s Infrastructure Solutions Group (ISG) is expected to grow at an 11-14% CAGR, with AI Servers leading at 20-25% CAGR. Mizuho noted this forecast might be conservative as Dell is involved with all at-scale AI deployments and leads in Enterprise, with approximately 85% of customers deploying generative AI on-premises within two years.

Dell’s Client Solutions Group (CSG) revenue is projected to grow at a 2-3% annual rate, with the company focusing on premium Commercial PC share gains, while long-term ISG operating margins are expected to reach 10-14% compared to current quarter estimates of approximately 11.5%. With a P/E ratio of 21.22 and overall financial health score rated as GOOD by InvestingPro, Dell shows promising fundamentals. For deeper insights into Dell’s valuation and growth prospects, including 12+ additional ProTips and comprehensive financial analysis, explore the full Pro Research Report available on InvestingPro.

In other recent news, Dell Technologies has raised its long-term financial targets, significantly increasing its annual revenue growth projection to 7-9% from the previous 3-4%. The company also plans to nearly double its annual non-GAAP diluted earnings per share growth target to 15% or better. Additionally, Dell has extended its commitment to grow its quarterly dividend by at least 10% annually through fiscal 2030. In another development, Dell completed a $4.5 billion senior notes offering across four tranches, including notes due between 2029 and 2036. Melius Research raised Dell’s stock price target to $200, citing the company’s potential to enhance earnings per share through enterprise AI adoption. Raymond James reiterated its Outperform rating with a $152 price target, following a securities analyst meeting where Dell reported AI-related activity exceeding previous forecasts. UBS also maintained its Buy rating and $155 price target, anticipating further insights into AI server revenue and profitability at Dell’s upcoming Analyst Day.

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