The bull market on Wall Street continues, helped by stocks like Nvidia And Microsoftwho are achieving great results due to the artificial intelligence (AI) boom. Knowing when to invest when the market is near an all-time high is difficult. Many people believe that the bull market will continue with a business-friendly new government and Big Tech investments in AI. These companies are expected to invest $250 billion in capital expenditures next year alone. And, as shown below, AI revenues could exceed $820 billion by 2030.
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This doesn’t mean stocks will continue to rise; there are always risks. Below I discuss buying strategies in a bull market. But first, there are two very different companies that can each deliver excellent long-term returns.
The number of hyperscale data centers (those over 100,000 square feet) eclipsed 1,000 this year, and the prediction is that at least 120 will come online annually for the foreseeable future. These enormous centers, approximately 1 million square meters in size, require infrastructure such as servers. Dell (NYSE: DELL) is the market leader in this field. Dell’s Infrastructure Solutions Group posted record revenue of $11.6 billion last quarter, growing 38%. The company’s total revenue rose 9% to $25 billion this quarter.
Dell believes its addressable AI market will reach $124 billion by 2027 and its total infrastructure market will reach $265 billion. Recent developments at its competitor Super microcomputer likely means that Dell will capture an even larger share of this market than previously expected. Supermicro is reeling from a short report, delayed financial filings and the firing of its accountants. The public struggle should benefit competition. As evidence, analysts have been busy raising their price targets for Dell this month.
Wells Fargo raised its target from $140 to $160 per share, while Morgan Stanley raised its target from $136 to $154. Targets are 7% to 11% above current price; However, if Dell continues to dominate the server market, analysts will likely bring it up again. Shareholders also benefit from a dividend and share buyback program that generated a combined $1 billion in revenue last quarter. Dell expects to increase its dividend by 10% annually through at least fiscal year 2028. Its AI capabilities, competitive battles, and rising price targets make Dell a tempting stock to own in the coming years.