Dell Technologies shares surged 32% to hit a record high on Friday, following an upbeat annual forecast that indicated the tech equipment maker was benefiting from the AI boom.

The stock climbed to US$124.59, adding more than $20-billion to the company’s market value.

The surge provided further evidence that rising AI adoption is driving gains across enterprise technology vendors, and added to the frenzy on Wall Street following Nvidia’s stunning rally.

“We have positioned ourselves well in AI,” chief operating officer Jeff Clarke said on Thursday, noting that more customers were demanding PCs and servers with AI capabilities.

Orders for the company’s AI-optimised servers, including the flagship PowerEdge XE9680, jumped 40% sequentially in the fourth quarter, Clarke said.

At least nine brokerages raised their price targets on Dell after the results. Currently, over three-quarters of analysts have a “buy” or higher rating with a median target price of $113.

“Dell’s AI business showed strong progress on key metrics… commentary on the PC market was similar to HP’s: that a rebound is coming, but it is being pushed out to the second half of the year,” said analysts at Bernstein.

Upside

PC and enterprise technology vendor HP’s sales declined for a seventh straight quarter in the most recent three-month period.

The recent upside in the business comes after Dell struggled for most part of the last two years as worldwide computer sales sharply declined. While revenue fell less than expected in its fourth quarter, annual revenue dropped for the first time since relisting in 2018.

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Dell forecast revenue between $91-billion and $95-billion for its current fiscal year ending January 2025, largely above analysts’ average estimate of $92.07-billion. — Yuvraj Malik, (c) 2024 Reuters