Dell Technologies (DELL) Stock Forecast & Price Target

Dell Technologies has experienced significant appreciation in its stock price, approximately 3.5 times since November 2022, largely attributed to its position as a key beneficiary in the growing AI infrastructure market. The company leads the IT market in servers and storage while also commanding a strong presence in the PC segment, generating over $100 billion in annual sales, which supports a valuation premium due to an accelerated growth rate driven by AI developments and refresh cycles. Overall, while the bear case projects a modest 5% compound annual growth rate (CAGR) for total revenue, the bull case suggests a more optimistic 12% CAGR, reflecting the potential for robust growth in both product and services revenue.

Dell Technologies faces significant challenges due to a notable decline in market share within the all-flash storage segment, losing nearly 10% since 2018, amid increasing competition and struggles in hyper-converged infrastructure. Coupled with the ongoing industry shift towards public cloud solutions, which poses a long-term secular headwind for Dell's server and storage offerings, the company may experience ongoing difficulties in maintaining its competitive position. Additionally, the decreasing attachment rates of storage to servers further highlight potential weakening demand in Dell’s hardware offerings, contributing to a negative outlook on the stock’s performance.