Where Will Dell Technologies Stock Be in 3 Years?

Dell Technologies (NYSE: DELL) has turned out to be a solid investment over the past three years, clocking impressive gains of 120% as of this writing and beating the tech-laden Nasdaq-100 Technology Sector index's jump of just 14% by a big margin.

However, a closer look at the chart tells us that Dell stock has simply taken off from the beginning of 2023. More specifically, shares of the company that's known for selling personal computers (PCs) and server equipment have shot up 212% since the start of last year. Dell was struggling before that on account of the weakness in the PC market , alongside a decline in the global server market.

However, the arrival of artificial intelligence (AI) has supercharged both these end markets and has lit a fire under Dell stock. But will the company be able to sustain its red-hot momentum and deliver more upside to investors over the next three years?

Dell operates through two business segments, the largest one being the infrastructure solutions group (ISG). This division includes sales of its server, storage, and networking solutions. The ISG business has been in fine form of late thanks to the huge investments being made in AI servers.

In the second quarter of fiscal 2025 (which ended on Aug. 2), Dell reported record server and networking revenue of $7.7 billion, an increase of 80% from the same period last year. Its overall ISG revenue increased 38% year over year to $11.6 billion, accounting for 46% of the company's overall top line of $25 billion.

It is worth noting that Dell's ISG business has generated $20.8 billion in revenue in the first six months of fiscal 2025, growing 30% year over year. The revenue from sales of servers and networking equipment grew at a much faster pace of 62% during this period to $13.1 billion. So, Dell's server and networking business is currently clocking an annual revenue run rate of $26 billion.

According to one estimate, the global AI server market could be worth an estimated $40 billion this year. At the same time, the AI data center networking market is forecast to generate $15 billion in revenue in 2024. The combined size of these two end markets could be $55 billion this year based on the two estimates.

If Dell manages to clock $26 billion in revenue this year from the server and networking market, it will end up controlling a nice share of the AI-focused opportunity on offer in this space. That would be great news for Dell investors, as the size of the AI server market in 2028 is expected to hit $115 billion, while data center AI networking could generate $25 billion in revenue. That would present a $140 billion addressable market for Dell.