JPMorgan Chase Upgrades Dell Technologies Rating, Eyes AI-Driven Growth

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The rating of Dell Technologies Inc. (NYSE: DELL) was recently renewed by JPMorgan Chase & Co. from “neutral” to “overweight,” representing a significant move in the company’s assessment of the tech giant’s outlook. The decision to take this action, which was made public on January 8, 2024, demonstrates a growing level of confidence in Dell’s position within the AI-driven computing investment cycle, a fast-growing industry that has significant potential for expansion.

The hope that the organization will benefit from Controlled by AI the PC investment cycle is the driving force behind the decision to give Dell an upgrade. Analysts at JPMorgan have set a new price target on Dell at $90.00. This is an increase from the previous price target of $77.00, indicating a potential upside of about 19% from the previous close. Businesses like Dell and HP (NYSE:HPQ) are expected to benefit from the AI-driven computing investment cycle, especially in selling higher-end servers and increasing margins.

This bullish outlook is supported by Dell Technologies’ recent success as well as its market position. In 2023, the company’s shares have increased by more than 90 percent, indicating a stable trajectory of recovery and development. A price-to-earnings ratio of 20.95 and a price-to-earnings ratio of 1.12 were present at Dell’s market cap, which today stands at $53.97 billion. The company’s latest financial data, which were published on November 30, further reinforces the company’s leadership position in the market.

The rollout of this update is in line with a broader industry trend in which chief information officers (CIOs) are increasingly emphasizing artificial intelligence (AI) and machine learning (ML). Morgan Stanley’s fourth-quarter CIO survey highlights artificial intelligence and machine learning as key targets, reflected in a projected increase in IT spending from 2.6% in 2023 to 3.3% in 2024 .The aforementioned trend highlights the growing importance of artificial intelligence and machine learning in various industries, and Dell Technologies appears to be well positioned to benefit from these advances.

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As part of a similar move, JPMorgan also picked Arista Networks (NYSE: ANET ) as a top pick, highlighting the company’s rapid growth in artificial intelligence. As a result of rising AI revenue and better insight into accelerating growth, analysts expect Arista Networks to maintain or perhaps widen its valuation premium, now set at 33 times its current price-to-earnings ratio.

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