Investment bank Morgan Stanley on Monday raised its price target on Dell Technologies stock as it forecast potential market share gains from beleaguered rival Super Micro Computer.
Analyst Erik Woodring raised his price target on Dell stock to 154 from 136 and kept his overweight, or buy, rating.
On the stock market today, Dell stock rose 3.2% to close at 138.51.
"Dell's AI server momentum remains strong, with our recent checks pointing to about $20 billion of AI server revenues in fiscal 2026, 56% higher than prior Morgan Stanley estimates," he said in a client note. That sales target equates to 94% year-over-year growth, thanks to sales of systems with Nvidia AI chips, he said.
Woodring said his $20 billion estimate represents his base case scenario and assumes no market share gains from Super Micro.
However, the probability is rising for his bull case scenario for Dell to get $40 billion in AI server sales in fiscal 2026. Dell's fiscal 2025 ends in late January. Under the bull case scenario, Dell would take one-third of Super Micro systems business via competitive wins, Woodring said.
Dell Stock Gaining From Super Micro's Issues
"We see Super Micro volatility as a key opportunity for Dell to take incremental share in fiscal 2026 and beyond," Woodring said.
Super Micro has been mired in financial reporting problems for months. It faces a possible delisting from Nasdaq if it can't meet compliance requirements on a timely basis.
Further, on Nov. 5, Super Micro cut its sales targets for the September and December quarters.
On Monday, Super Micro stock sank 5.3% to close at 23.23.
SMCI stock is down 57% in the past three months and 18% year to date.
Dell stock ranks second out of 15 stocks in IBD's computer hardware industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 47 out of 99.
Meanwhile, SMCI stock ranks fourth in the group.
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