Why Dell stock is likely to continue surging in 2025: Evercore ISI

Investing.com -- Dell Technologies is poised for a strong performance in 2025, according to Evercore ISI. The firm maintained an Outperform rating and a price target of $150 on the stock in a note Wednesday. 

The firm provided its takeaways from its meeting with the company, explaining that its bullish outlook is driven by expected revenue acceleration across Dell’s portfolio, including AI servers, storage, and PCs. 

Dell (NYSE:DELL ) continues to see robust demand for AI servers, supported by a strong backlog of $4.5 billion and pipeline momentum up 50% quarter-over-quarter, according to Evercore. 

Despite this, the firm’s analysts state that "conversion of orders to revenues remains heavily dependent on GPU allocations," which may cause some revenue volatility.

While AI server demand is primarily driven by tier-2 cloud companies, Evercore says Dell also sees growing interest from enterprise customers. With over 2,000 enterprise AI clients, the company is said to expect this number to increase significantly in FY26.

The analysts note that Dell anticipates growth across both its Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) in FY26. The most robust growth is expected in AI servers, followed by traditional servers, storage, and PCs.

Storage is another area of expected growth, with Evercore saying Dell is positioned to recapture lost market share. They add that the company is also developing "Project Lightning," an internal parallel file system aimed at AI-centric customers, which is set to launch in fall 2025.

Despite a muted PC performance in the October quarter, Evercore said Dell is remains optimistic about a PC upgrade cycle driven by the end-of-life for Windows 10 in October 2025 and an extensive installed base of aging PCs.

Finally, Evercore states that Dell acknowledges the competitive landscape in AI servers, with rivals like Super Micro, HPE, and Lenovo, but expects fewer competitors in the sovereign and enterprise markets.

 

Source: Investing.com