Dell Technologies will continue to see outsized benefit from growing demand for artificial intelligence data centers, according to Goldman Sachs. The firm reiterated a buy rating on the personal computing and technology stock on Wednesday, with a $155 per share price target. Goldman’s forecast implies roughly 37% upside ahead for Dell stock from its $113.16 close on Tuesday. Dell stock has surged more than 51% in 2024. After vising the company’s Texas headquarters and meeting with executives, analyst Michael Ng says the firm came away from the discussions optimistic that the growing demand for artificial intelligence data centers will help boost Dell stock. Ng says Dell will specifically see benefits due to higher demand from tier 2 cloud and AI CSP [constraint satisfaction problems] servers, as well as enterprise/sovereign customers. In particular, Ng pointed to Dell’s $3.8 billion AI server backlog in the second-quarter as a prime example of robust demand. Over the long-term, the analyst says both enterprise and sovereign customers will emerge as the key drivers as margins improve for AI servers. “Enterprise and sovereign AI opportunities are in earlier stages of adoption, and the company continues to optimize its organization to address AI demand across customer verticals and regions,” Ng said. “AI server margins should improve over time through a greater mix of higher margin services revenue and a diversification to a larger number of AI server customers.” The analyst also says renewed demand for PC’s could also help the stock moving forward, and pointed out that a large portion of the company’s installed-base comprises hardware that isn’t powerful enough to run Windows 11. This dynamic could spur a strong upgrade cycle, he says. “DELL is optimistic about an industry PC refresh cycle despite a slower-than-expected recovery relative to the beginning of the year with demand likely to be driven by the aging PC installed base, Windows 10 end-of-life in October 2025, and AI PCs,” Ng said. “Of the approximately 1.5 [billion] installed base of PCs, about 400-450 [million] PCs are on Windows 10, of which 200-250 [million] likely are on hardware that does not meet minimum requirements for Windows 11.”