Bank of America has increased its price target for Dell Technologies Inc. (DELL.US) from $205 to $246 and for Hewlett Packard Enterprise (HPE.US) from $32 to $38, citing expected benefits from the development of Agentic AI.

Analysts at the bank, led by Wamsi Mohan, stated in a report that the next phase of AI is Agentic AI, which involves multi-step workloads requiring more powerful CPU hardware, enhanced storage access, and execution systems. Agentic AI transforms individual, isolated inference events into sequential workflows, generating more inference events per task and increasing persistent workloads. This shift is expected to drive higher overall infrastructure spending by enterprises on AI servers, intelligent infrastructure systems, and storage equipment.

The growing importance of Agentic AI is not only boosting demand for AI servers and storage but also stimulating growth in the traditional server businesses of both Dell and Hewlett Packard Enterprise. Dell has been selling traditional servers to emerging cloud service providers, and the sales momentum for these servers is anticipated to strengthen further in the coming years.

Analysts further indicated that as Agentic AI fuels demand growth, both Dell and Hewlett Packard Enterprise are positioned to capture additional market share in the server sector. They added that the transition to Agentic AI will first boost demand for AI servers due to increased inference frequency and the shift of model applications toward continuous productive workloads.

Dell is a leading original equipment manufacturer (OEM) in the AI server market. Global AI server revenue is projected to reach $496 billion by 2026, with Dell expected to capture a 12% market share. The company is also accelerating its share expansion among emerging cloud providers, with related revenue potentially reaching $100 billion this year.

Although Hewlett Packard Enterprise is shifting its focus toward networking following its acquisition of Juniper Networks (JNPR), it remains a high-end AI server OEM and is poised to benefit from the trend. The company's AI server revenue for fiscal 2026 is estimated to reach $6.5 billion.