Citi sees major upside for Dell and Hewlett Packard Enterprise as AI infrastructure demand stays strong, raising its price targets to $515 and $74. Here's the full breakdown.
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While chip stocks wrestled with AI-spending anxiety this week, Citi delivered a strikingly bullish signal for a different corner of the AI trade: hardware suppliers powering AI data centers. Analyst Asiya Merchant reiterated buy ratings on both Dell Technologies and Hewlett Packard Enterprise (HPE), raising price targets on both in a note that argues demand for AI infrastructure remains firmly intact.
New price targets, and the upside they imply
Citi's updated targets point to significant room to run:
- Dell Technologies: price target raised to $515 from $475, implying roughly 17% upside from Thursday's close
- Hewlett Packard Enterprise (HPE): price target raised to $74 from $70, implying a striking 55% upside from Thursday's close
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Why Citi is turning more bullish now
The upgrade follows a string of supportive data points from elsewhere in the AI hardware ecosystem, including Advanced Micro Devices' analyst day and Intel's earnings report, both of which beat expectations and highlighted businesses ramping up spending on tech infrastructure. Merchant specifically pointed to AI, new servers, and data center buildouts as the key drivers behind that spending surge.
Dell's specific growth drivers
For Dell, Citi's bullish case centers on a larger addressable market for CPU-related infrastructure, robust server demand broadly, and continued strength in AI infrastructure deployments across its enterprise customer base. Those factors, combined with resilient corporate tech budgets, underpin the firm's confidence in further upside for the stock.
Why this matters beyond Dell and HPE
This note lands at an important moment: while semiconductor stocks have sold off sharply on AI-spending anxiety, Citi's read on the hardware layer of the AI buildout tells a more optimistic story. That contrast highlights how unevenly investors are pricing different parts of the AI supply chain right now — chipmakers face skepticism over payoff timing, while server and infrastructure suppliers are seen as direct, near-term beneficiaries of enterprise AI spending.
What to watch
- Dell and HPE's next earnings reports, to see whether server order growth confirms Citi's thesis
- Enterprise AI capex trends more broadly, as a read-through for the rest of the hardware sector
- Whether other analysts follow Citi's lead in raising targets across the AI infrastructure hardware space
Bottom line
Citi's bullish call on Dell and HPE is a reminder that AI-driven demand isn't limited to chipmakers — the servers and infrastructure that house those chips are seeing their own wave of investor optimism. Whether that optimism proves durable will likely hinge on next week's broader tech earnings.
This post is based on reporting from CNBC as of July 24-25, 2026. This content is for informational purposes only and does not constitute investment advice.
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