The Zhitong Finance App learned that Dell's stock price rose sharply by more than 11% to a record high on Wednesday. This increase was due to Morgan Stanley analyst Eric Woodlin's optimism about the company. Woodlin predicts that Dell will see significant sales growth as demand for artificial intelligence servers continues to increase. He raised Dell's target share price from $128 to $152 and listed it as the stock of choice.

In a report released on Wednesday, Woodlin said that Dell's momentum in the artificial intelligence server market is accelerating, which has given the stock a fresh upward momentum. He pointed out that Dell's artificial intelligence server business has surpassed that of any other OEM manufacturer. He predicts that by fiscal year 2025 (ending February next year), Dell's revenue in the AI server field will reach about 10 billion US dollars.

This sharp rise in stock prices was the biggest one-day increase since March 1. At the time, Dell's earnings report showed that the company had already begun to benefit from the artificial intelligence boom. Although Dell's annual increase is over 99%, it still lags behind its competitor Ultra Micro Computer (SMCI.US) (233% increase), but has surpassed HPE Technology (HPE.US)'s 6% increase this year.

Currently, most artificial intelligence servers are built around Nvidia (NVDA.US) chips. These chips are highly valued in the tech industry because they are used to deploy advanced artificial intelligence models from companies including Google, OpenAI, and Meta. The servers sold by Dell use Nvidia's latest AI chips, including the H100 GPU and the latest Blackwell generation chips. At the Nvidia annual conference in March, Nvidia CEO Hwang In-hoon specifically mentioned that customers can order the latest AI chips through Dell.

Hwang In-hoon said at the conference, “You're going to need an artificial intelligence factory, and no company is better at building large-scale end-to-end systems for the enterprise than Dell.” He also noted that Dell's co-founder Michael Dell was very happy to accept the order.

Woodlin pointed out in the report that although it is difficult to accurately predict Nvidia GPU shipments and the rate of AI server production growth, he is confident that Dell's business will continue to grow due to increased demand for artificial intelligence servers and the continued increase in Dell's market share. He also mentioned that Dell may be able to sell additional hardware to customers, such as additional products such as data storage.

At the same time, Dell's PC business may also be boosted when new features are showcased at next week's Microsoft conference, particularly those long-awaited artificial intelligence features. Many analysts expect these features to drive demand for new PCs.

Although consumers and businesses that purchased new machines between 2020 and 2021 delayed the schedule for the next upgrade, causing PC sales to decline for two consecutive years after the pandemic, Woodlin believes the PC industry will grow again and perform beyond expectations, which will benefit Dell's overall performance.

“We are optimistic about the recovery of the PC market because we have not only heard about the need for upgrades and updates in recent CIO and VAR surveys, but have also seen an upward correction in notebook ODM production in recent months,” he concluded in the report.

Dell is expected to announce quarterly earnings for April 30, while Nvidia plans to release its quarterly earnings on May 22.

According to information, after rising through the heatwave of personal computers (PCs) in the millennium, Dell fell into silence for many years until the explosion of AI technology in 2016 Dell realized this was an opportunity to turn around. It began to vigorously deploy AI: in 2018, the high-end storage PowerMax with a built-in machine learning engine was released, and in 2020, the AI server PowerEdge and AI PC were released. From AI servers to AI storage platforms to personal computer products with built-in AI functions, Dell can be described as arming itself to the teeth with AI.

In fact, since early March this year, when it released its impressive financial report for the fourth fiscal quarter of the previous fiscal year, Dell has entered the eyes of more investors betting on AI, and its stock price has accelerated since then. On March 1, the first trading day after the release of earnings reports, Dell surged 31.6% on one day.

In the fourth fiscal quarter of fiscal year 2024 ending February of this year, Dell's revenue fell 11% year over year, the decline was lower than expected, and net profit surged 89% year over year. Thanks to AI optimization of the server business, Dell's Infrastructure Solutions Group (ISG) business base revenue declined 6% year over year during the quarter, but increased 10% month over month.

Dell CEO Jeff Clarke said at the time of the earnings release that the strong momentum of AI-optimized servers continued. Orders increased by nearly 40% month-on-month, backlog orders almost doubled, and sales reached 2.9 billion US dollars at the end of the 2024 fiscal year.

Although the fiscal quarter is expected to decline by 12% to 16% year over year, Dell is optimistic that the company will resume growth in the 2025 fiscal year, fueled by the AI boom.

Dell Technology's chief financial officer Yvonne McGill said Dell's decision to increase its annual dividend by 20% “demonstrates our confidence in the business.” McGill also anticipates that revenue from the computer business should grow at a “low single digit,” while the infrastructure sector will achieve medium ten-digit growth driven by AI.