Dell Technologies Inc. (NYSE:DELL) shares rose close to 5% in early trading on Wednesday after analysts at Bank of America reaffirmed a “Buy” rating, saying the company is well positioned to benefit from accelerating adoption of artificial intelligence.
The positive view followed a discussion between Bank of America analysts and Dell CEO Michael Dell, during which the company pointed to strong demand trends, solid supply availability and increasing enterprise investment in AI infrastructure.
Dell described artificial intelligence as a “foundational shift” in the computing industry, with demand continuing to grow across multiple sectors. According to the brokerage, the company expects to achieve its long-term financial targets by capitalizing on demand for AI infrastructure products such as servers, storage systems and networking solutions.
Although the broader technology sector continues to face supply chain constraints, particularly in memory components and semiconductors, Dell believes its scale and long-standing supplier relationships provide a competitive advantage. The company said it currently has sufficient supply to meet projected demand while continuing to secure additional components.
During its fourth-quarter earnings report, Dell said revenue from its AI-optimized server business is expected to double by fiscal 2027 and reiterated its commitment to returning additional capital to shareholders. In the fourth quarter, revenue from the Infrastructure Solutions Group — which includes servers, storage and related software — surged 73% to $19.6 billion.
Bank of America left its earnings estimates unchanged but raised the valuation multiple applied to the stock, citing Dell’s ability to gain market share while managing industry constraints. The firm projects continued earnings expansion, forecasting earnings per share to reach about $15.42 by 2027. It also expects free cash flow to increase significantly, supported by disciplined capital allocation and strong demand for AI infrastructure.
Speaking during the discussion with the bank, Michael Dell said the company remains confident about long-term growth driven by broader AI adoption, operational improvements and continued returns to shareholders. Management expects revenue growth, stronger cash generation and further market share gains as businesses accelerate investment in AI-powered technologies.