Dell Surprises Wall Street—Is the AI Rally Just Beginning?

Evercore ISI analyst Amit Daryanani raised the firm's price target on Dell Technologies (DELL) to $205 from $160 and keeps an Outperform rating on the shares. Shares of Dell and HPE (HPE) are both up 20%-plus this week and while "it's difficult to pin this move on one specific catalyst," Evercore sees several events over the past week that have played a role, including a growing investor view that CPU driven server demand may be more resilient than previously expected; investors increasingly viewing Dell, and to a lesser extent HPE, as potential beneficiaries of any reallocation of Nvidia (NVDA) supply following last week's DOJ headlines around Super Micro (SMCI); and a divergence between OEMs and memory names this week as DRAM/NAND stocks trade down. For that last dynamic, the firm sees two drivers: Google's (GOOGL) TurboQuant announcement highlighting emerging efficiencies that could reduce memory intensity in AI workloads and the fact that the market may be beginning to price in a more favorable cost/supply backdrop for OEMs.