Dell Technologies (NYSE:DELL) is on the cusp of a multi-year revenue acceleration, according to Evercore ISI analysts.
The firm, which has an Outperform rating and $140 price target on DELL shares, said in a note Wednesday that they "think DELL is at the cusp of seeing their revenues accelerate from 3-4% towards 6-8% structurally that could unlock not just upside to rev/EPS forecasts but also result in a higher valuation for DELL.
They believe Dell is positioned to further capitalize on its current AI momentum, with shipments expected to increase quarter-on-quarter through FY25.
"We believe Dell has MULTIPLE upside levers that can drive top-line growth above the long-term 3-4% target and get to >$10 EPS power over next few years driven by AI server contribution, AI attach, share gains, buybacks, and M&A," added Evercore. "We assume that for every $1 of AI server spend, there is an additional ~$2 in storage/networking/services over a duration of 3-4 years, we could see Dell growing revenue at a high-single-digit rate (CAGR FY24-FY28), well above its long-term range of 3-4%."
Given the strong stock appreciation and outperformance in the year-to-date, Evercore believes investors will need to start underwriting a higher growth rate for shares to work towards $150 to $160.