Dell Boosts Long-Term Guidance. The Stock Is Rising.

The company is targeting annual revenue growth of 7% to 9% through fiscal 2030. (Dreamstime)

Key Points

• Dell Technologies increases its long-term annual revenue growth target to 7% to 9% through fiscal 2030, up from 3% to 4%.
• The company’s adjusted per-share earnings growth target is now 15% or better, nearly doubling its previous forecast of 8%.
• Dell cites demand for artificial-intelligence infrastructure as the reason for the boost to guidance.

Dell Technologies stock was rising Tuesday after the company boosted its long-term financial guidance, citing demand for artificial-intelligence infrastructure.

The company is targeting annual revenue growth of 7% to 9%, up from a previous range of 3% to 4%. Its adjusted per-share earnings growth target was boosted to 15% or better, almost double its prior forecast of 8%.

Dell stock was rising 2.8% to $149.90, putting it on track for a new 52-week closing high.

“Customers are hungry for AI and the compute, storage and networking we provide to deploy intelligence at scale,” Dell CEO Michael Dell said in the release. “As AI continues to expand into businesses and governments around the world, the opportunity ahead is massive.”

Dell reiterated its plan to return over 80% of adjusted free cash flow to shareholders through rising dividends and stock buybacks. The company also expects to double its annual adjusted earning per share over the next five years.

At its financial analyst day in New York, Dell Chief Operating Officer Jeff Clarke said AI computing demand due to the rise of reasoning models is more than 100 times more than they expected one year ago.

The latest AI models have a reasoning feature that allows them to reflect more thoroughly on a query by performing numerous thought computations to arrive at a higher-quality response.

Clarke said the 3,000 Dell customers who have bought AI products are seeing real return-on-investment from their purchases, finding more use cases for AI technology, and returning to buy more AI solutions from the company. The pace of AI is “accelerating,” he said. “There are no signs of slowing down…we’re just beginning to see the capabilities.”

Other hardware and AI computing stocks also were on the rise Tuesday. Super Micro Computer jumped 1.8%, Hewlett Packard Enterprise was rising 2.1%, and Dell partner CoreWeave climbed 2.1%.

Write to Nate Wolf at nate.wolf@barrons.com and Tae Kim at tae.kim@barrons.com