Bank of America on Monday boosted price targets for two enterprise computing suppliers, arguing that the emergence of agentic artificial intelligence will lift demand for CPU-intensive infrastructure components that both companies are well placed to supply.
Analyst Wamsi Mohan raised his price target for Dell to $246 from $205 and lifted his target for Hewlett Packard Enterprise to $38 from $32, while reiterating Buy ratings on both stocks.
The firm framed its revisions as reflecting a structural shift in the nature of AI workloads. Bank of America’s note describes agentic AI as altering inferencing dynamics by converting single inferencing events into sequenced workflows - a change that produces more inference events per task. That pattern, the bank says, increases demand for AI servers, accompanying infrastructure solution stacks and storage capacity.
Crucially, the bank highlights how the sequential and interdependent characteristics of agentic workloads raise the importance of central processing units across the infrastructure stack. Bank of America contends this emphasis on CPUs benefits both the traditional server franchises of Dell and HPE as well as their dedicated AI server offerings.
On market share and revenue expectations, Mohan regards Dell as a leading OEM in AI servers, attributing roughly 12% of total AI server revenues to the company. Bank of America’s model estimates total AI server revenues of $496 billion in 2026, and the note states Dell’s share-gain momentum is accelerating particularly at what the firm describes as Neo Clouds.
HPE is forecast to generate about $6.5 billion in AI server revenues this year, according to the note. For infrastructure solution stacks more broadly, Bank of America estimates Dell and HPE hold OEM shares of approximately 11% and 9%, respectively, positioning them as primary beneficiaries if demand for these stacks rises.
The firm also flagged that its financial models may be conservative given the potential acceleration in agentic AI-driven demand, indicating room for upside should the technology adoption trend intensify.
Summary
Bank of America raised price targets and reiterated Buy ratings for Dell and HPE, arguing agentic AI’s move toward sequenced inferencing will drive higher CPU intensity and increased demand for servers, solution stacks and storage.
Key points
- Bank of America raised Dell’s price target to $246 and HPE’s to $38 and kept Buy ratings for both stocks.
- The bank’s thesis centers on agentic AI creating sequenced inferencing workflows that increase inference events per task, lifting demand for AI servers, infrastructure stacks and storage.
- Estimated market positions: Dell ~12% share of AI server revenues; HPE projected to earn $6.5 billion in AI server revenues this year; Dell and HPE estimated to hold 11% and 9% OEM share in infrastructure solution stacks, respectively. The firm sees total AI server revenues of $496 billion in 2026.
Risks and uncertainties
- Bank of America notes its models are likely conservative if agentic AI demand picks up more than expected - indicating uncertainty in demand projection and potential model underestimation.
- The investment case depends on agentic AI changing infrastructure requirements as described; if workload characteristics do not evolve as projected, the expected lift in CPU intensity and related demand could be reduced.
- Market-share and revenue estimates are modeled assumptions; actual outcomes will depend on execution, competitive dynamics and the pace of enterprise adoption.