Citi has significantly raised Dell’s 12-month target price from $135 to $160, indicating a shift in Citi’s outlook for Dell’s stock from cautious to bullish.
According to Zhitong Finance APP, the Wall Street financial giant Citigroup recently raised the target price for AI server manufacturer Dell (DELL.US) to $160 and maintained a ‘buy’ rating. Citigroup is optimistic about Dell’s second calendar quarter and full-year performance for 2025 and 2026. This also indicates that Citigroup’s analyst team is highly optimistic about Dell’s upcoming earnings report due at the end of August and the future guidance that Dell’s management will provide. The AI computing power supply chain, which has seen its stock prices reach record highs this year, is expected to receive significant positive catalysts.
As a key player in the global AI computing power supply chain and the absolute leader in the AI server market, Dell is one of the ‘Top 10 AI Tech Stocks Most Watched on Wall Street,’ a list that includes NVIDIA, Taiwan Semiconductor, Broadcom, and AMD, among other dominant players in the AI computing power supply chain. Recently, the analyst team led by Asiya Merchant at Citigroup raised Dell’s 12-month target price from $135 to $160, signaling a shift from a cautious to a bullish outlook, while maintaining a ‘buy’ rating. As of Thursday’s close, Dell’s stock price was at $138.86.
This bullish research report comes ahead of Dell’s official earnings release. According to the analyst team, the latest supply chain channel checks show that global corporate hardware spending is expanding significantly, with AI computing infrastructure spending showing a continued surge. It is expected that Dell’s AI server business will also expand strongly, driving the company’s performance beyond expectations. Channel checks also indicate that, apart from printing and consumer computer products, Dell’s other core business areas are expected to perform much better than the market expects.
Another AI server giant, Hon Hai, reports strong performance.
In the research report, Citi cited the financial data from another AI server manufacturer, Hon Hai, stating that Hon Hai’s performance highlights the sustained strong growth in AI computing equipment support. It emphasized that Hon Hai, as the largest AI server product foundry for the ‘AI chip leader’ NVIDIA, is fully benefiting from the wave of AI infrastructure construction. Similarly, it is expected that Dell, as a leader in the AI server market, will also see substantial growth in its performance.
Hon Hai’s latest financial report shows that its AI server contract manufacturing business has surpassed its long-standing reliance on smart consumer electronics to become the largest revenue source. This business drove Hon Hai’s total revenue to NT$1.79 trillion (approximately $59.73 billion), a record high, with a year-over-year increase of 16%. Net profit grew by 27% year over year. Hon Hai’s core brand, Foxconn, is the largest manufacturer of Apple’s iPhones.
In terms of performance outlook, Hon Hai expects that the revenue from AI servers in the third quarter will surge by more than 170% year-over-year, driving continued significant year-over-year growth in overall revenue. The full-year revenue outlook remains consistent with the guidance provided in May, with strong growth anticipated.
Dell’s performance is expected to drive the AI computing power supply chain to continue on a bullish trajectory.
Dell’s earnings report released at the end of May showed that the value of AI server orders for the quarter ending May 2 even exceeded the total value of AI server shipments for the entire fiscal year 2025. Dell expects the profitability of its computer, server, and storage businesses to continue to expand significantly.
In the earnings report released at the end of May, Dell maintained its previous forecast of $15 billion in actual AI server sales for the full year. This represents an approximately 50% increase over the already robust $9.8 billion in AI server sales for the fiscal year ending January 2025. If the earnings and future outlook announced at the end of August continue to exceed expectations, it is expected to drive the share prices of core companies in the AI computing power supply chain to maintain a very strong bullish trajectory.
Dell has been one of the biggest winners in the unprecedented wave of AI infrastructure since 2023, with its stock price rising by as much as 200% since 2023. The company has primarily benefited from the continuously surging demand for high-performance AI servers, with key clients including xAI, founded and led by the world’s richest man, Tesla CEO Elon Musk, as well as cloud computing giants Microsoft and Amazon AWS, and large global AI data center operators such as CoreWeave Inc., which is supported by NVIDIA.
Dell, along with its major AI server competitor, Super Micro Computer, and Hon Hai, have recently been ramping up production of B200/GB200 AI servers equipped with NVIDIA’s latest Blackwell architecture AI GPUs to win larger-scale business from companies building and using AI applications. Many generative AI applications, such as those driving ChatGPT, Claude, and Sora, require enormous data processing capabilities and increasingly expanding hardware computational resources.
Through its long-standing close cooperation with NVIDIA, Dell uses the latest NVIDIA GPUs and integrates the full suite of CUDA acceleration tools to provide powerful GPU acceleration for the indispensable technical link in global enterprises’ AI technology deployment—AI training/inference workloads. Dell’s deep partnership with NVIDIA ensures the highest priority for optimal integration and performance optimization of hardware and CUDA software systems.