Dell jumps on strong forecast

Core Viewpoint - Dell's shares are experiencing a significant increase due to a strong forecast driven by AI servers, despite mixed reactions from Wall Street regarding memory cost challenges [1][5]. Company Performance - Dell raised its AI server guidance to $25 billion, exceeding street estimates, with an expected $9.4 billion in the fourth quarter alone [5]. - The company's backlog surged nearly 60% since July, indicating robust demand across cloud providers, sovereign entities, and enterprise customers [5]. Market Sentiment - Wall Street is divided on Dell's outlook; while Morgan Stanley remains underweight due to concerns over memory costs, Bank of America maintains a buy rating, citing early stages of AI adoption and upcoming PC refresh cycles as positive factors [2][3]. - UBS argues that the market is overly negative, noting Dell's shares are trading at about 11 times their 2027 earnings estimate, presenting a compelling opportunity for long-term investors [4]. Industry Trends - The AI server market is expanding beyond hyperscalers, with growing demand from sovereign entities and model builders identified as new growth drivers [3]. - The overall sentiment in the memory market remains contentious, with ongoing debates about pricing and its impact on margins [6].