Morgan Stanley lifts Dell stock price target to $126, maintains overweight

On Wednesday, Morgan Stanley (NYSE:MS) increased its price target on Dell Technologies Inc (NYSE:DELL) shares, setting the new mark at $126.00, up from the previous $126.00, while retaining an Overweight rating on the stock. The adjustment comes amid expectations of a modest outperformance for Dell’s April quarter, yet the firm anticipates that the full-year guidance will remain unchanged. With a market capitalization of $78 billion and a P/E ratio of 17.45, InvestingPro analysis indicates the stock is currently trading near its Fair Value.

The research firm’s commentary highlighted a balance in Dell’s performance, noting a positive momentum in AI infrastructure, which is expected to counterbalance a mixed environment in traditional infrastructure and the challenges posed by a volatile tariff situation. Despite these factors, the forecast for Dell remains optimistic, especially for the second half of the year. The company’s robust revenue of $95.57 billion and strong recent market performance support this outlook, though InvestingPro data shows the RSI suggests the stock is in overbought territory.

Morgan Stanley’s analysis suggests that, given Dell’s recent strong performance in the market, the stock might experience a temporary pause around the time earnings are announced, which InvestingPro data indicates is just 8 days away. This perspective is based on the limited near-term estimate upside potential, with analyst targets ranging from $91 to $170.

The firm’s stance on Dell is buoyed by the anticipation of a favorable setup in the latter half of the year, which supports the decision to maintain an Overweight rating on the stock. The new price target of $126 reflects Morgan Stanley’s confidence in Dell’s ongoing strategy and market position.

Dell Technologies, with its adjusted price target, is expected to continue navigating the current market conditions while leveraging its strengths in AI infrastructure. The company’s ability to maintain its full-year guidance amidst the anticipated slight beat for the April quarter speaks to its strategic planning and execution.

In other recent news, Dell Technologies has made significant advancements in its AI and data center infrastructure. The company announced upgrades to its Dell AI Factory, focusing on simplifying AI deployment with new infrastructure and expanded partnerships. These updates include the introduction of Dell PowerEdge servers equipped with NVIDIA (NASDAQ:NVDA) Blackwell Ultra GPUs, promising enhanced performance for large language models. Additionally, Dell has upgraded its data center offerings with PowerProtect Data Domain All-Flash appliances, which improve data restore speeds and energy efficiency. The company also introduced new features for its PowerScale software, enhancing object storage support and cybersecurity measures.

At the annual Dell World conference, Dell highlighted its strategic focus on enterprise AI adoption, with a keynote presentation from CEO Michael Dell. The company anticipates that a significant portion of enterprises will shift their AI workloads to on-premises infrastructure in the coming years. Evercore ISI has reiterated its Outperform rating on Dell’s stock, maintaining a $120 price target, citing Dell’s comprehensive solutions for AI infrastructure needs. Furthermore, Dell’s collaboration with NVIDIA aims to provide full-stack enterprise AI solutions, enhancing the company’s position in the AI market. These developments underscore Dell’s commitment to advancing AI technologies and supporting enterprise customers in their AI journeys.

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