Dell Technologies Inc. DELL shares are trading higher Tuesday after Morgan Stanley said its checks indicate the company is ramping its AI server builds.
What To Know: Morgan Stanley raised its bull case valuation on the stock from $81 to $84. The focus of the case is on DELL's leveraging of generative AI technology, with the company recently placing build orders for 15k to 25k AI servers in CY23 to 24.
The firm said its supply chain checks suggest the company is ramping its AI server builds with an estimated 15-25k AI server build orders in 2023-2024.The firm estimates AI servers could represent a $5 billion annual revenue business.
It was also noted that, aside from servers, DELL also has other AI opportunities such as the expansion of its enterprise generative AI
offerings.
Morgan Stanley speculates that generative AI could contribute an incremental $3 billion to $7 billion of revenue and 27 cents of EPS in FY25.
However, GPU availability remains a challenge in DELL realizing AI server revenue currently. Nonetheless, Morgan Stanley sees AI as a massive opportunity for Dell and reiterates its Overweight rating, labelling the company as its most-preferred US PC OEM.
Related Link: Why Citigroup Shares Are Moving
DELL Price Action: Shares of DELL were up 5.85% at $57.76 at the time of publication, according to Benzinga Pro.
Image by Gerd Altmann from Pixabay
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