Dell Rejoins the S&P 500: What Growth Catalysts Are in Play?
$Dell Technologies Inc.(DELL)$ is marking its 40th anniversary with a major milestone. The S&P Dow Jones Indices recently announced that Dell, along with $Palantir Technologies Inc.(PLTR)$ $Erie Indemnity(ERIE)$, will be added to the $S&P 500(.SPX)$ on September 23.
At the same time, $American Airlines(AAL)$ $Etsy(ETSY)$ $Bio-Rad Laboratories(BIO)$ will join the S&P 400 MidCap Index.
Dell Stock Surged
Dell first joined the S&P 500 in 1988 but was taken private in 2013. The company returned to the NYSE on December 28, 2018. Since the beginning of the year, Dell's stock has surged nearly 40%, and it's up 50% over the past year.
In May, Dell launched a new line of AI-driven PCs powered by $Qualcomm(QCOM)$ processors, and announced new servers supporting $NVIDIA Corp(NVDA)$ ’s latest chips set to release later this year.
Dell’s Chairman and CEO, Michael Dell, recently stated that the digital transformation will impact all aspects of life, work, and society. Dell aims to be a foundational company in this digital era and deliver value to shareholders.
However, the AI transformation has brought some turbulence. On August 5, Dell announced a reduction in its sales team, laying off about 12,500 employees to invest in a new team focused on AI products and services.
Sales executives Bill Scannell and John Byrne indicated that the company is streamlining operations, including reducing management layers and shifting investment focus, to unlock the value of modern IT and AI for rapid growth.
Analysts See “Multiple Growth Catalysts”
Shortly after, Dell reported Q2 earnings that beat Wall Street expectations, with revenue up 9% to $25 billion. COO Jeffrey Clarke expressed optimism about the upcoming PC upgrade cycle, driven by aging equipment, the end of Windows 10 support, and significant advances in AI architecture and applications.
Following Dell's inclusion in the S&P 500, analysts have weighed in. Citigroup analyst Asiya Merchant reiterated a “Buy” rating with a $160 price target, citing multiple growth catalysts such as the rebound in general infrastructure demand, the ongoing PC upgrade cycle through 2025, AI momentum, and capital returns.
Susquehanna has a “Neutral” rating on Dell with a $120 target price. While noting Dell’s scale, brand, and internal financing in AI hardware, Susquehanna highlights two risks: unclear economics of AI hardware and an undefined strategy for scaling AI services.
They forecast EPS of $8.57 for FY 2026 and $9.40 for FY 2027, compared to the market consensus of $9.40 and $10.87.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
