On Friday, BofA Securities maintained a Buy rating on Dell Technologies Inc. (NYSE:DELL) shares with a steady price target of $155.00. The firm's outlook is positive ahead of the company's fiscal third-quarter 2025 earnings report, which is scheduled for release on November 26th.
Analysts at BofA Securities highlight Dell's robust fundamentals and anticipate benefits from sustained demand in the Infrastructure Solutions Group (ISG) due to the need for data center equipment, including AI servers. Additionally, they foresee a cyclical recovery in PCs within the Client Solutions Group (CSG) for fiscal year 2026.
For the third fiscal quarter of 2025, BofA Securities projects revenue and earnings per share (EPS) of $24.7 billion and $2.06 respectively. These figures are slightly above the consensus estimates of $24.7 billion in revenue and $2.05 in EPS, and also surpass Dell's guidance midpoint of $24.5 billion in revenue and $2.00 in EPS. The analysts expect ISG revenue to show a significant year-over-year increase of 35%, while CSG revenue is projected to grow at a more modest rate of 1%.
Looking forward to the fourth fiscal quarter, the firm's estimates are more optimistic than the Street's expectations, with projected revenues of $26.5 billion and EPS of $2.81, compared to the Street's forecast of $25.7 billion in revenue and $2.65 in EPS.
BofA Securities predicts a strong double-digit revenue growth for ISG at 46% year-over-year and a low-single-digit year-over-year revenue growth for CSG at 2%. The firm also expects ISG operating margins (OM) to reach the mid-teens, while CSG OM is anticipated to align with the long-term target range midpoint of 6-7%.
For the full fiscal year 2025, BofA Securities believes that both ISG and CSG operating margins will fall within their respective long-term target ranges. The firm's confidence in Dell's portfolio strength and the anticipated growth across its segments into the year 2025 underpins the decision to maintain the Buy rating and $155 price target, which is based on 15 times their calendar year 2026 estimated EPS.
In other recent news, Dell Technologies has seen a flurry of activity, with a focus on expanding its artificial intelligence (AI) capabilities. Mizuho (NYSE:MFG) Securities recently upgraded its price target for Dell to $155, maintaining an outperform rating. The firm anticipates Dell will capture more market share in the AI server segment, particularly with the introduction of the single GPU GB300A Blackwell.
Dell has also been making significant strides in expanding its AI offerings. The company has introduced new servers and services aimed at simplifying AI adoption for enterprises. These include the Dell PowerEdge XE servers and Dell Data Lakehouse. Collaborations with NVIDIA (NASDAQ:NVDA) and AMD (NASDAQ:AMD) have also been announced, aiming to accelerate enterprise AI adoption.
In terms of financial maneuvers, Dell issued $1.5 billion in senior notes as part of its strategy to manage its debt profile effectively. Analysts from Citi and Evercore ISI maintained a positive outlook on Dell, while Susquehanna issued a Neutral rating, expressing concerns about the uncertain economic returns of AI hardware.
The company's financial outlook does not currently include the expected ramp-up of AI server revenue, suggesting there could be additional upside to the AI server revenue targets. Dell's focus is not solely on revenue growth but also on expanding sustainable EBIT margins throughout fiscal year 2025. These are the recent developments at Dell Technologies.
InvestingPro Insights
Dell Technologies Inc. (NYSE:DELL) continues to demonstrate strong market performance, aligning with BofA Securities' positive outlook. According to InvestingPro data, Dell's market capitalization stands at an impressive $100.5 billion, reflecting investor confidence in the company's future prospects. The company's revenue for the last twelve months as of Q2 2025 reached $91.84 billion, with a quarterly revenue growth of 9.12% in Q2 2025, supporting BofA's projections for robust performance in the upcoming earnings report.
InvestingPro Tips highlight Dell's financial strength and shareholder-friendly policies. The company has been aggressively buying back shares and has raised its dividend for three consecutive years, indicating a commitment to returning value to shareholders. This is further evidenced by the high shareholder yield and a current dividend yield of 1.28%.
Dell's strong market position is reflected in its stock performance, with a remarkable 84.4% year-to-date price total return and an 88.9% return over the past year. These figures support BofA's bullish stance on the stock and its potential for continued growth.
For investors seeking more comprehensive insights, InvestingPro offers 13 additional tips for Dell Technologies, providing a deeper understanding of the company's financial health and market position.
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