Dell Stock Jumps After Boosting Long-Term Growth Forecasts
Company raises long-term revenue and profit guidance, citing surging demand for its AI server infrastructure and enterprise IT solutions.
Dell Technologies (DELL) saw its shares climb over 5% after the company announced a significant upgrade to its long-term financial outlook, signaling strong confidence in its strategic direction. The company pointed to the booming artificial intelligence sector as a primary driver for the optimistic new forecasts.
The technology giant to a range of 7% to 9%, more than doubling its previous guidance of 3% to 4%. In a further sign of confidence, Dell also increased its target for adjusted earnings per share (EPS) growth to 15% or higher annually, a substantial leap from the prior estimate of 8%.
Company executives attributed the bullish revision to the 'insatiable demand' for high-powered infrastructure capable of training and operating generative AI models. As businesses globally race to integrate AI, Dell's enterprise solutions, particularly its portfolio of AI-optimized servers and data storage systems, are experiencing a surge in orders. This positions the company as a key hardware beneficiary of the ongoing AI revolution.
Investors responded favorably to the news, which was coupled with a reaffirmation of Dell's commitment to shareholder returns. The company plans to return over 80% of its adjusted free cash flow to shareholders through dividends and stock buybacks. Furthermore, Dell extended its goal of increasing its dividend by , reinforcing the company's robust cash flow position and its focus on delivering value to its investors. The updated guidance suggests Dell is successfully navigating the competitive tech landscape and capitalizing on the most significant growth trends in enterprise IT.