Key Highlights
- BofA increased price targets: Dell to $246 (previously $205), HPE to $38 (previously $32)
- Analyst Wamsi Mohan maintains Buy ratings for both companies
- Sequential AI workflows creating increased demand for CPU-heavy servers and storage systems
- Dell commands approximately 12% of AI server revenue market; HPE projected to reach $6.5B in AI server sales by 2026
- BofA acknowledges its forecasts may underestimate rapidly growing agentic AI adoption
Bank of America increased its price projections for Dell Technologies and Hewlett Packard Enterprise this week, pointing to the emergence of agentic AI as a major driver behind strengthening demand across both AI-focused and conventional server platforms.
Wamsi Mohan, the firm’s analyst, elevated Dell’s price objective to $246 from $205 while raising HPE’s target to $38 from $32. Both companies retained their Buy recommendations.
These revised targets aren’t driven by general AI enthusiasm. Instead, they reflect a fundamental transformation in AI workload architecture.
Conventional AI inference operates as a single transaction. Agentic AI, however, transforms individual queries into multiple sequential operations, with each step requiring separate inference processing. This structure exponentially increases computational requirements for every task.
According to BofA’s analysis: agentic AI “turns one discrete inferencing event into sequenced workflows, driving more inference events per task.” The result is heightened demand for AI-capable servers, storage solutions, and supporting infrastructure.
The critical factor involves CPU utilization. Since agentic processes operate sequentially with interdependent steps, they place substantially greater demands on CPUs compared to conventional AI applications. This trend directly benefits Dell and HPE’s traditional server operations, extending beyond their specialized AI product lines.
Dell’s AI Server Market Position
Dell stands among the leading original equipment manufacturers in AI server technology, capturing roughly 12% of overall AI server revenue. BofA projects the complete AI server market will reach $496 billion by 2026. Dell is also experiencing accelerating market share expansion with Neo Cloud service providers.
In the infrastructure solution stack segment, BofA calculates Dell maintains an 11% OEM market share, positioning the company among primary beneficiaries as market demand intensifies.
Mohan’s $246 target price incorporates an elevated valuation multiple, supported by expanding demand spanning both AI server platforms and traditional computing infrastructure.
HPE’s Projected Revenue Performance
HPE is forecast to achieve $6.5 billion in AI server revenue during 2026. The company holds a 9% OEM share within infrastructure solution stacks, which BofA identifies as another expanding opportunity.
The upgraded $38 price target, increased from $32, demonstrates BofA’s assessment that HPE’s conventional server operations will experience significant growth alongside its AI-dedicated offerings.
BofA explicitly stated that its financial models “are likely conservative given the pickup in agentic AI demand.” Such acknowledgment is uncommon from analysts and indicates potential for additional upside beyond current projections.
Dell shares declined 0.06% while HPE advanced 1.63% when the analysis was released. Neither stock experienced significant volatility that trading session, though the elevated price targets positioned both companies prominently for investors monitoring AI infrastructure opportunities.
The updated price targets were issued on April 27, 2026.
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