Share prices of Dell Technologies (DELL) went through the roof by adding more than 22% since September 1 to set their new record high above $70. The start-up, initially aimed to sell IBM compatible computers built from stock components, now costs nearly $50 billion. It currently benefits from mad waves of artificial intelligence (AI) hype and improving demand for hardware, which may replace more than a year of rather inactive market. The latter tendency was previously revealed by companies like Cisco and Hewlett Packard, but it was Dell to seize the momentum as it reported $1.74 of EPS (equity per share) on $22.9 billion sales compared to expert consensus of only $1.14 for EPS on $20.85 billion. Servers and networking revenue climbed by 11% vs Q1 2023, driven by "higher demand for AI-optimized servers", Michael Dell, Dell CEO said. He also raised company's full-year financial forecast.
Investment groups are raising target prices for Dell. Wells Fargo set its new target to $75 from $65, Citigroup put it to $70 from $60 and JP Morgan raised its target to $68 from $61. Yet, my mind combined with technical analysis experience are telling me that the next $80 bar could be even exceeded. Measuring the previous price progress and watching on relative behaviour of other AI-boosted stocks before exemplifies this view. Anyway, odds of a another surge could be sold better than bets on a roll back to the levels last seen before Q2 report, even if some price squatting occurs.