Citigroup: Nvidia's strong performance "ignites" Dell and enterprise AI demand
Citi analyst Asiya Merchant stated that Nvidia's strong performance indicates a continued growth in enterprise artificial intelligence demand, which is particularly beneficial for Dell Tech. Merchant has a "Buy" rating on Dell, with a target price of $160. It is expected that the total artificial intelligence market will reach $171 billion to $174 billion by 2027, with an annual growth rate of 20% to 25%. Nvidia's revenue for the third fiscal quarter surged by 94%, setting a new historical high for its stock price, while Dell's stock price rose by 0.76% in after-hours trading
According to Zhitong Finance APP, Citigroup stated that NVIDIA's (NVDA.US) strong performance and guidance indicate a continued robust demand for enterprise artificial intelligence, which is particularly beneficial for Dell Technologies (DELL.US). Analyst Asiya Merchant mentioned in a report to clients: "Overall, we believe that demand is positive for enterprise server OEMs (Dell, HPE, and AMD)."
The analyst noted, "Specifically, during the conference call, management highlighted the strong appeal of artificial intelligence in the enterprise environment, especially Agent AI, with enterprise AI revenue more than doubling year-over-year, and the business pipeline continues to build, accumulating more potential clients or sales opportunities."
Merchant rated Dell as "Buy," with a target price of $160. He added that both Dell and HPE believe that the total addressable market for artificial intelligence could reach between $171 billion and $174 billion by 2027, with a compound annual growth rate of 20% to 25% starting from 2023.
AI leader NVIDIA's latest financial report released yesterday showed that several metrics exceeded market expectations. Total revenue for the third quarter surged by 94%, and net profit doubled, with the revenue outlook for the next quarter also surpassing the average expectations.
During the earnings call, CEO Jensen Huang assured investors that its new product line, the Blackwell architecture AI GPU series, will continue to lead the significant expansion trend driven by the artificial intelligence boom, pushing NVIDIA's stock price to a record high of $152.89 during intraday trading on Thursday.
As of the time of publication, Dell's stock price rose by 0.76% in after-hours trading