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NEW YORK - Dell Technologies (NYSE:DELL), currently trading near its 52-week high at $145.76 with a market capitalization of $97.69 billion, announced on Tuesday an increase to its long-term financial framework, significantly raising its annual revenue growth target to 7-9% from the previous 3-4% and nearly doubling its annual non-GAAP diluted earnings per share growth target to 15% or better. According to InvestingPro data, the stock has shown remarkable momentum with a 96% return over the past six months.
The company also extended its commitment to grow its quarterly dividend by 10% or more annually through fiscal 2030, two years beyond its previous commitment that ran through fiscal 2028. This builds on Dell’s track record of raising dividends for four consecutive years, with a current dividend yield of 1.44%.
Dell reaffirmed its plan to return over 80% of adjusted free cash flow to shareholders through share repurchases and dividends, maintaining its target of 100% or better for net income to adjusted free cash flow conversion.
"Customers are hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale," said Michael Dell, chairman and chief executive officer, in the press release. "As AI continues to expand into businesses and governments around the world, the opportunity ahead is massive."
The company highlighted its focus on artificial intelligence as a key driver of future growth, with Jeff Clarke, vice chairman and chief operating officer, noting that Dell has grown its AI business to $20 billion in just two years.
David Kennedy, interim chief financial officer, pointed to the company’s track record of returning capital to shareholders, stating that Dell has returned $14.5 billion since beginning its dividend program in fiscal 2023.
The updated financial targets were announced during Dell’s Securities Analyst Meeting. The company also reaffirmed its previously issued financial guidance for fiscal 2026 third quarter and full year that was provided in late August. For investors seeking deeper insights into Dell’s AI strategy and financial outlook, InvestingPro offers comprehensive analysis and 12 additional exclusive ProTips, along with detailed valuation metrics and growth forecasts in its Pro Research Report.
In other recent news, Dell Technologies completed a $4.5 billion senior notes offering through its subsidiaries, Dell International L.L.C. and EMC Corporation. The offering was divided into four tranches, with varying interest rates and maturities, and the notes are senior unsecured obligations. Fitch Ratings has upgraded Dell Technologies to ’BBB+’ from ’BBB’, highlighting the company’s rapid growth in its AI server business and consistent core EBITDA leverage. Additionally, Dell introduced its PowerEdge XR8720t server, which aims to streamline Open RAN and Cloud RAN deployments by reducing the need for multiple servers.
UBS has reiterated a Buy rating on Dell, maintaining a price target of $155, as they anticipate the company’s Analyst Day will shed light on AI server revenue opportunities. JPMorgan also maintained its Overweight rating with a $145 price target, noting fewer significant changes in the business ahead of Dell’s upcoming Securities Analyst Meeting. These developments reflect Dell’s strategic focus on AI and telecommunications infrastructure, alongside its financial maneuvers to support growth.
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