Evercore ISI's Tactical Outperform list now includes Dell Technologies (DELL, Financials) ahead of its third-quarter fiscal 2025 earnings announcement due to its considerable AI exposure.
Under the direction of Amit Daryanani, Evercore analysts pointed out that Dell is positioned to surpass consensus projections of $24.69 billion in sales and $2.07 in profits per share for the quarter ending in October. Strengths in storage, general-purpose computing, and artificial intelligence servers could help the company's Infrastructure Solutions Group.
With an AI server backlog estimated between $3.5 billion and $4 billion, the analysts predict Dell's AI server revenue will reach $3.1 billion during the quarter. Although rising AI server sales might strain margins, a better storage system could help to counter these difficulties.
Evercore has set a $150 price objective for Dell shares. Following market closure on Tuesday, Nov. 26, Dell is expected to disclose its third-quarter results.
Dell has concentrated recently on increasing its artificial intelligence capacity. With a 23% sequential surge, reaching $3.2 billion in the second quarter and $5.8 billion year-to-date, the business stated a notable increase in AI-optimized server demand. This expansion helped Dell's Infrastructure Solutions Group—a 38% rise from the year before—to reach a record income of $11.65 billion.
Furthermore, Dell has improved its yearly sales and profit projections because of increased demand for its AI-optimized servers driven by Nvidia (NVDA, Financials) processors.
Dell is also financing artificial intelligence projects even if its PC business saw a 4% sales drop. To simplify processes and concentrate on key areas, the corporation is considering selling SecureWorks, its cybersecurity business.
