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DELL Rises 56% Year to Date: Can AI Focus Push the Stock Higher?
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Dell Technologies (DELL - Free Report) shares have returned 55.7% year to date (YTD), outperforming the broader Zacks Computer & Technology sector’s return of 23.5%.
Over the same timeframe, shares of HP and Apple have returned 19.3% and 15.1%, respectively. The industry has appreciated 18.5% 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.
Year-to-Date Performance
Image Source: Zacks Investment Research
So, can DELL’s AI push boost the shares further? Let’s dig deep to find out.
Dell Stock Rides on Strong Portfolio, Partner Base
Dell Technologies is benefiting from an expanding partner base. NVIDIA (NVDA - Free Report) has played a pivotal role in developing the Dell AI Factory. The collaboration integrates Dell Technologies’ portfolio with NVIDIA’s AI Enterprise software platform and Tensor Core GPUs, enhancing compute power and simplifying AI application development and deployment for faster time to value.
Dell AI Factory launch has been a key catalyst. It combines Dell Technologies solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising NVIDIA, Meta Platforms, Microsoft and Hugging Face.
In collaboration with NVIDIA, Dell is transforming telecom networks with advanced AI solutions. This partnership enables communications service providers 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.
DELL Offers Positive View for 2H25
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 Technologies is strengthening engineering capabilities, including data center networking and design, to support its AI-related initiatives.
Dell Technologies expects strong top-line growth in the second half of fiscal 2025, driven by robust AI demand. PC shipments are expected to improve in the fourth quarter of fiscal 2025.
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.
Earnings are expected to be $7.80 per share (+/- 25 cents), up 9% at the mid-point for fiscal 2025.
Earnings Estimate Revisions Trend Higher for DELL
The Zacks Consensus Estimate for Dell’s fiscal 2025 earnings is pegged at $7.85 per share, up by a penny over the past 30 days and indicating 10.1% year-over-year growth.
The consensus mark for Dell’s revenues is currently pegged at $97.5 billion, indicating year-over-year growth of 10.26%.
DELL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 16.32%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
DELL Shares Are Cheap
Dell Technologies shares are cheap, as suggested by a Value Score of A.
DELL stock is trading at a significant discount with a forward 12-month P/E of 13.16X compared with the sector’s 26.49X.
DELL’s P/E Ratio (F12M)
Image Source: Zacks Investment Research
DELL shares are also trading above the 50-day moving average, indicating a bullish trend.
DELL Shares Trade Above 50-Day SMA
Image Source: Zacks Investment Research
What Should Investors Do With DELL Shares?
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.
However, a contraction in fiscal 2025 gross margin of roughly 180 bps (up from previous guidance of 150 bps) due to the negative impact of inflation on costs, stiff competition and a higher mix of low-margin of AI optimized servers is a headwind.
Continuing weakness in the consumer segment of the PC market is a concern.
Image: Bigstock
DELL Rises 56% Year to Date: Can AI Focus Push the Stock Higher?
Dell Technologies (DELL - Free Report) shares have returned 55.7% year to date (YTD), outperforming the broader Zacks Computer & Technology sector’s return of 23.5%.
DELL shares have also surpassed the Zacks Computer – Micro Computers industry and peers HP (HPQ - Free Report) and Apple (AAPL - Free Report) .
Over the same timeframe, shares of HP and Apple have returned 19.3% and 15.1%, respectively. The industry has appreciated 18.5% 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.
Year-to-Date Performance
Image Source: Zacks Investment Research
So, can DELL’s AI push boost the shares further? Let’s dig deep to find out.
Dell Stock Rides on Strong Portfolio, Partner Base
Dell Technologies is benefiting from an expanding partner base. NVIDIA (NVDA - Free Report) has played a pivotal role in developing the Dell AI Factory. The collaboration integrates Dell Technologies’ portfolio with NVIDIA’s AI Enterprise software platform and Tensor Core GPUs, enhancing compute power and simplifying AI application development and deployment for faster time to value.
Dell AI Factory launch has been a key catalyst. It combines Dell Technologies solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising NVIDIA, Meta Platforms, Microsoft and Hugging Face.
In collaboration with NVIDIA, Dell is transforming telecom networks with advanced AI solutions. This partnership enables communications service providers 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.
DELL Offers Positive View for 2H25
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 Technologies is strengthening engineering capabilities, including data center networking and design, to support its AI-related initiatives.
Dell Technologies expects strong top-line growth in the second half of fiscal 2025, driven by robust AI demand. PC shipments are expected to improve in the fourth quarter of fiscal 2025.
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.
Earnings are expected to be $7.80 per share (+/- 25 cents), up 9% at the mid-point for fiscal 2025.
Earnings Estimate Revisions Trend Higher for DELL
The Zacks Consensus Estimate for Dell’s fiscal 2025 earnings is pegged at $7.85 per share, up by a penny over the past 30 days and indicating 10.1% year-over-year growth.
The consensus mark for Dell’s revenues is currently pegged at $97.5 billion, indicating year-over-year growth of 10.26%.
DELL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 16.32%.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
DELL Shares Are Cheap
Dell Technologies shares are cheap, as suggested by a Value Score of A.
DELL stock is trading at a significant discount with a forward 12-month P/E of 13.16X compared with the sector’s 26.49X.
DELL’s P/E Ratio (F12M)
Image Source: Zacks Investment Research
DELL shares are also trading above the 50-day moving average, indicating a bullish trend.
DELL Shares Trade Above 50-Day SMA
Image Source: Zacks Investment Research
What Should Investors Do With DELL Shares?
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.
However, a contraction in fiscal 2025 gross margin of roughly 180 bps (up from previous guidance of 150 bps) due to the negative impact of inflation on costs, stiff competition and a higher mix of low-margin of AI optimized servers is a headwind.
Continuing weakness in the consumer segment of the PC market is a concern.
DELL currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.