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DELL's AI for Telecom Aids CSPs: Time to Buy Shares or Better to Wait?
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Dell Technologies (DELL - Free Report) unveiled the Dell AI for Telecom program on Wednesday, which helps communications service providers (CSPs) quickly and easily deploy AI solutions.
As part of the Dell AI Factory framework, the program combines Dell’s expertise in AI, its infrastructure and services, along with software and hardware from key partners in the AI ecosystem.
CSPs are facing significant challenges to keep up with the rapidly evolving technologies and customer needs due to the AI revolution. Dell AI for Telecom will develop and deploy on-premises solutions that CSPs can easily adopt to enhance network performance and improve customer service.
Dell AI Factory launch has been a key catalyst for DELL. It combines Dell Technologies solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising NVIDIA (NVDA - Free Report) , Meta Platforms, Microsoft and Hugging Face.
DELL-NVIDIA Collaboration Aids Telecom Networks
In collaboration with NVIDIA, Dell is transforming telecom networks with advanced AI solutions. This partnership enables CSPs to implement AI-driven technologies that optimize network performance, improve customer experience and reduce operational costs.
DELL and NVIDIA are working to enable AI deployments at the telecom network’s edge through the PowerEdge XR8000 server, which is equipped with NVIDIA L4 Tensor Core GPUs. This combination enhances compute power and simplifies AI application development and deployment for faster time to value.
These servers are specifically designed for telecom and edge applications, offering compact, scalable, and modular solutions that simplify both deployment and maintenance.
DELL Shares Rise 57% YTD: Will the Bull Run Continue?
Over the same time frame, Apple and HP shares have increased 17.6% and 19.8%, respectively. Industry has appreciated 18.7% YTD.
DELL’s outperformance can be primarily attributed to the strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI (GenAI) applications.
In the second quarter of fiscal 2025, orders for AI-optimized servers increased to $3.2 billion with an increasing number of enterprise customers, including Tier-2 cloud service providers. DELL shipped $3.1 billion of AI servers in the reported quarter, and its AI server backlog remains healthy at $3.8 billion.
DELL is optimizing its sales force to cover both small and large customer segments as well as geographies. It is also strengthening engineering capabilities, including data center networking and design, to support its AI-related initiatives.
DELL believes that the AI hardware and services market will be worth $174 billion by 2027, witnessing a CAGR of more than 22% between 2023 and 2027.
DELL Raises Fiscal 2025 Guidance
For fiscal 2025, Dell expects revenues between $95.5 billion and $98.5 billion, indicating growth of 10% year over year at the mid-point of $97 billion. It expects the Infrastructure Solutions Group to grow roughly 30%, fueled by AI.
The Zacks Consensus Estimate for fiscal 2025 revenues is currently pegged at $97.43 billion, indicating year-over-year growth of 10.18%.
Earnings are expected to be $7.80 per share (+/- 25 cents), up 9% at the mid-point for fiscal 2025.
The consensus mark for Dell’s fiscal 2025 earnings is pegged at $7.84 per share, up a penny over the past 30 days and indicating 9.96% year-over-year growth.
DELL Shares – What Should Investors Do?
Dell’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors. Hence, investors who already own the stock may expect the company's growth prospects to be rewarding over the long term.
DELL shares are trading above the 50-day and 200-day moving averages, indicating a bullish trend.
DELL Shares Trade Above 50-Day & 200-Day SMA
Image Source: Zacks Investment Research
DELL shares are currently undervalued, as suggested by a Value Score of A.
It is trading at a significant discount with a forward 12-month P/E of 13.34X compared with the sector’s 26.66X.
Price/Earnings Ratio (F12M)
Image Source: Zacks Investment Research
DELL currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a better entry point to accumulate the stock.
Image: Bigstock
DELL's AI for Telecom Aids CSPs: Time to Buy Shares or Better to Wait?
Dell Technologies (DELL - Free Report) unveiled the Dell AI for Telecom program on Wednesday, which helps communications service providers (CSPs) quickly and easily deploy AI solutions.
As part of the Dell AI Factory framework, the program combines Dell’s expertise in AI, its infrastructure and services, along with software and hardware from key partners in the AI ecosystem.
CSPs are facing significant challenges to keep up with the rapidly evolving technologies and customer needs due to the AI revolution. Dell AI for Telecom will develop and deploy on-premises solutions that CSPs can easily adopt to enhance network performance and improve customer service.
Dell AI Factory launch has been a key catalyst for DELL. It combines Dell Technologies solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising NVIDIA (NVDA - Free Report) , Meta Platforms, Microsoft and Hugging Face.
DELL-NVIDIA Collaboration Aids Telecom Networks
In collaboration with NVIDIA, Dell is transforming telecom networks with advanced AI solutions. This partnership enables CSPs to implement AI-driven technologies that optimize network performance, improve customer experience and reduce operational costs.
DELL and NVIDIA are working to enable AI deployments at the telecom network’s edge through the PowerEdge XR8000 server, which is equipped with NVIDIA L4 Tensor Core GPUs. This combination enhances compute power and simplifies AI application development and deployment for faster time to value.
These servers are specifically designed for telecom and edge applications, offering compact, scalable, and modular solutions that simplify both deployment and maintenance.
DELL Shares Rise 57% YTD: Will the Bull Run Continue?
Dell Technologies shares have jumped 57.1% in the year-to-date (YTD) period, outperforming the broader Zacks Computer & Technology Sector’s gain of 23.3%. It has also outperformed the Zacks Computer - Micro Computers industry and peers like Apple (AAPL - Free Report) and HP (HPQ - Free Report) .
DELL Outperforms Sector YTD
Image Source: Zacks Investment Research
Over the same time frame, Apple and HP shares have increased 17.6% and 19.8%, respectively. Industry has appreciated 18.7% YTD.
DELL’s outperformance can be primarily attributed to the strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI (GenAI) applications.
In the second quarter of fiscal 2025, orders for AI-optimized servers increased to $3.2 billion with an increasing number of enterprise customers, including Tier-2 cloud service providers. DELL shipped $3.1 billion of AI servers in the reported quarter, and its AI server backlog remains healthy at $3.8 billion.
DELL is optimizing its sales force to cover both small and large customer segments as well as geographies. It is also strengthening engineering capabilities, including data center networking and design, to support its AI-related initiatives.
DELL believes that the AI hardware and services market will be worth $174 billion by 2027, witnessing a CAGR of more than 22% between 2023 and 2027.
DELL Raises Fiscal 2025 Guidance
For fiscal 2025, Dell expects revenues between $95.5 billion and $98.5 billion, indicating growth of 10% year over year at the mid-point of $97 billion. It expects the Infrastructure Solutions Group to grow roughly 30%, fueled by AI.
The Zacks Consensus Estimate for fiscal 2025 revenues is currently pegged at $97.43 billion, indicating year-over-year growth of 10.18%.
Earnings are expected to be $7.80 per share (+/- 25 cents), up 9% at the mid-point for fiscal 2025.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
The consensus mark for Dell’s fiscal 2025 earnings is pegged at $7.84 per share, up a penny over the past 30 days and indicating 9.96% year-over-year growth.
DELL Shares – What Should Investors Do?
Dell’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors. Hence, investors who already own the stock may expect the company's growth prospects to be rewarding over the long term.
DELL shares are trading above the 50-day and 200-day moving averages, indicating a bullish trend.
DELL Shares Trade Above 50-Day & 200-Day SMA
Image Source: Zacks Investment Research
DELL shares are currently undervalued, as suggested by a Value Score of A.
It is trading at a significant discount with a forward 12-month P/E of 13.34X compared with the sector’s 26.66X.
Price/Earnings Ratio (F12M)
Image Source: Zacks Investment Research
DELL currently carries a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a better entry point to accumulate the stock.
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.