Dell (DELL) shares rose over 8% Wednesday, adding to their 3.5% gain during the previous trading session as the server maker boosted its long-term financial outlook.
Dell said during an investor event Tuesday that it expects revenue to grow 7% to 9% annually through its 2030 fiscal year, up from its prior range of 3% to 4%. The company forecast that adjusted earnings per share will grow 15% or more yearly during that time frame, up from its prior growth estimate of 8%.
Dell executives pointed to companies’ rising capital expenditures on AI as they invest in infrastructure to power the technology. That infrastructure includes Dell’s servers with Nvidia’s (NVDA) latest GPUs (graphics processing units), or AI chips.
“Hardware is cool again, and we are uniquely positioned, providing opportunities to grow across both data center infrastructure and AI PCs,” said the company’s founder and CEO, Michael Dell.
Wall Street analysts at firms including TD Cowen, JPMorgan (JPM), and Bank of America (BAC) raised their price targets on Dell stock, citing AI momentum.
To be sure, the wave of recent spending on AI is being scrutinized, as analysts debate whether firms — namely, OpenAI (OPAI.PVT) — can live up to their hundreds of billions of dollars in AI infrastructure commitments. At the same time, concerns of circularity in AI investments has fueled further fears of an AI bubble, while the long term financial gains of renting AI servers has been called into question due a new report on the margins of Oracle’s cloud business.