Bank of America raised price targets on Dell Technologies (DELL) and HP Enterprise (HPE) on Monday, citing the rise of agentic AI as a catalyst for stronger demand in both AI and traditional server hardware. Analyst Wamsi Mohan lifted Dell's target to $246 from $205 and HPE's to $38 from $32, maintaining Buy ratings on both stocks.
The upgrades are driven by a specific shift in how AI workloads are structured. Traditional AI inferencing is a single event, while agentic AI turns one request into a chain of sequential steps, each requiring its own inference. This multiplies the compute demand per task. BofA described it as "turning one discrete inferencing event into sequenced workflows, driving more inference events per task." That translates into greater demand for AI servers, storage, and supporting infrastructure.
A key detail is the role of CPUs in agentic workflows. Because they are sequential and interdependent, agentic AI leans harder on CPUs than traditional AI workloads do. This directly benefits Dell and HPE's core server businesses, not just their dedicated AI offerings.
Dell holds approximately 12% of total AI server revenues, with BofA estimating the total AI server market at $496 billion for 2026. Dell is also seeing share gains accelerating at Neo Cloud providers and holds an 11% OEM share in infrastructure solution stacks. On April 27, 2026, Dell stock hit an all-time high of $219.50, up 2.09% on the day, giving the company a market cap of $142.4 billion. The stock has gained 73% year-to-date and 132% over the past year. BofA's new $246 price target is now the highest published target on the street from covered firms.
Another catalyst is a $1.4 billion purchase agreement with Boost Run for Dell hardware and software to support enterprise AI demand, highlighted by Evercore ISI in its own target raise to $240. Boost Run's deal comes ahead of its planned merger with Willow Lane Acquisition Corp., which will create a new publicly listed entity under the ticker “BRUN.”
For HPE, the firm is expected to generate $6.5 billion in AI server revenues in 2026 and holds 9% OEM share in infrastructure solution stacks. BofA's new price target of $38, up from $32, reflects the view that HPE's traditional server business will get a meaningful lift alongside its AI-specific products.
BofA was direct in noting that its models "are likely conservative given the pickup in agentic AI demand." This admission suggests the analyst sees room for further upside. At the time of the note, Dell stock was down 0.06% and HPE was up 1.63%.
Not all analysts are fully on board. Wolfe Research initiated coverage of Dell with a Peerperform rating, flagging concerns around memory pricing and supply chain risks. BofA also listed downside scenarios including a faster economic slowdown, a stronger US dollar, tariff pressure, potential supply issues with Intel processors, and competitive pressure from rivals.
Dell's AI server business now accounts for 27% of total sales, a share expected to keep climbing. Despite the strong run, Dell's PEG ratio sits at just 0.66, which analysts say suggests the stock is still trading at an attractive level relative to its earnings growth.
