Dell Technologies (DELL) AI Stock Analysis

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Dell Technologies

(NYSE:DELL)

63Neutral

Dell Technologies' overall score is driven by strong financial performance and positive earnings call outlook, particularly in AI and ISG growth. However, significant financial leverage, bearish technical indicators, and competitive pressures weigh on the stock. While the valuation is reasonable, current market momentum suggests caution.

Positive Factors

Competitive Advantage

DELL has set itself apart from its competitors by leveraging its close partnership with NVDA and first mover advantage with T2 CSPs.

Customer Satisfaction

A likely repeat purchase order from one of DELL's core T2 CSP customers underlines customer satisfaction and continued business relationships.

Revenue Growth

An increase in DELL AI server system orders indicates growing demand and potential revenue growth.

Negative Factors

Stock Performance

Dell shares have declined 15% since the beginning of the year and are trading at 9.5x Street C26 EPS.

Dell Technologies (DELL) vs. S&P 500 (SPY)

Market Cap

$49.99B

Dividend Yield2.48%

Average Volume (3M)9.07M

Price to Earnings (P/E)11.2

Beta (1Y)2.04

Revenue Growth7.84%

EPS Growth42.63%

CountryUS

Employees108,000

SectorTechnology

Sector Strength40

IndustryComputer Hardware

Share Statistics

EPS (TTM)6.22

Shares Outstanding358,710,360

10 Day Avg. Volume9,936,904

30 Day Avg. Volume9,068,367

Financial Highlights & Ratios

PEG Ratio0.26

Price to Book (P/B)N/A

Price to Sales (P/S)0.73

Price to Cash Flow (P/CF)11.00

P/FCF Ratio18.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$137.17

Price Target Upside82.89% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

Dell Technologies Business Overview & Revenue Model

Company DescriptionDell Technologies Inc. is a multinational technology company headquartered in Round Rock, Texas, that provides a wide range of technology solutions and services. The company operates across multiple sectors, including personal computing, enterprise infrastructure, and IT services. Dell Technologies is known for its core products such as PCs, laptops, workstations, servers, storage solutions, networking products, and software. It also offers services such as cloud computing, cybersecurity, and data analytics, catering to both individual consumers and businesses globally.

How the Company Makes MoneyDell Technologies generates revenue through multiple streams, primarily from the sale of its hardware products like laptops, desktops, and servers. The company also earns significant income from its infrastructure solutions group, which provides enterprise-grade storage, networking, and virtualization solutions. Additionally, Dell Technologies offers software and services, including IT consulting and support, cloud services, and cybersecurity solutions. The company's earnings are further bolstered by its strategic partnerships and collaborations with other tech firms, enhancing its service offerings and expanding market reach. Key factors contributing to Dell's revenue include its extensive distribution network, diverse product portfolio, and a strong focus on innovation and customer service.

Dell Technologies Financial Statement Overview

Summary

Dell Technologies demonstrates robust revenue growth and profitability, with stable cash flows. However, significant financial leverage and negative equity pose risks. The company's operational efficiency and cash flow generation are strengths, counterbalanced by balance sheet concerns.

Income Statement

Positive

Dell Technologies exhibited a strong gross profit margin and a notable improvement in net profit margin over the years. Revenue growth has been positive, indicating a healthy expansion in sales. However, the EBIT margin reflects some operational challenges, with EBITDA margins showing better stability.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio, primarily due to negative equity. This indicates high financial leverage, which poses potential risk. Return on equity is not calculable due to negative equity, and the company's equity ratio is negative, representing financial instability.

Cash Flow

Positive

Operating cash flow has remained solid, with a positive trend in free cash flow growth, although it was zero in the latest period. The operating cash flow to net income ratio is favorable, indicating efficient cash earnings conversion.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
95.57B	88.42B	102.30B	101.20B	86.67B
	Gross Profit
21.92B	20.87B	22.69B	21.89B	20.14B
	EBIT
6.24B	5.21B	5.62B	4.91B	4.15B
	EBITDA
6.24B	8.75B	7.60B	12.02B	9.93B
	Net Income Common Stockholders
4.59B	3.21B	2.44B	5.56B	3.25B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.63B	7.37B	8.88B	10.01B	10.34B
	Total Assets
79.75B	82.09B	89.61B	92.73B	123.42B
	Total Debt
24.57B	25.99B	30.48B	27.96B	40.45B
	Net Debt
20.93B	18.63B	21.60B	17.95B	30.10B
	Total Liabilities
81.13B	84.40B	92.64B	94.31B	115.39B
	Stockholders Equity
-1.48B	-2.40B	-3.12B	-1.69B	2.95B
Cash Flow		Free Cash Flow
1.87B	5.92B	562.00M	7.51B	9.32B
	Operating Cash Flow
4.52B	8.68B	3.56B	10.31B	11.41B
	Investing Cash Flow
-2.21B	-2.78B	-3.02B	1.31B	-460.00M
	Financing Cash Flow
-5.82B	-7.09B	-1.63B	-16.61B	-5.95B

Dell Technologies Technical Analysis

Technical Analysis Sentiment

Negative

Last Price75.00

Price Trends

50DMA

100.77

Negative

100DMA

111.43

Negative

200DMA

115.57

Negative

Market Momentum

MACD

-2.94

Positive

RSI

38.83

Neutral

STOCH

18.63

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DELL, the sentiment is Negative. The current price of 75 is below the 20-day moving average (MA) of 92.51, below the 50-day MA of 100.77, and below the 200-day MA of 115.57, indicating a bearish trend. The MACD of -2.94 indicates Positive momentum. The RSI at 38.83 is Neutral, neither overbought nor oversold. The STOCH value of 18.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DELL.

Dell Technologies Risk Analysis

Dell Technologies disclosed 38 risk factors in its most recent earnings report. Dell Technologies reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Dell Technologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTAP	69 Neutral	$15.71B	14.08	114.33%	2.71%	5.46%	23.49%
SMCI	69 Neutral	$17.70B	14.40	32.21%	―	124.51%	87.78%
STX	68 Neutral	$14.13B	12.21	-109.27%	4.25%	24.17%	―
WDC	68 Neutral	$10.62B	7.29	13.99%	―	38.59%	―
DELL	63 Neutral	$49.99B	11.23	-179.12%	2.48%	7.84%	42.63%
HPQ	61 Neutral	$21.31B	8.12	84.33%	5.00%	1.03%	-18.56%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

* Technology Sector Average

Performance Comparison

DELL

Dell Technologies

75.00

-50.27

-40.13%

HPQ

23.38

-4.94

-17.44%

NTAP

NetApp

77.07

-26.74

-25.76%

STX

Seagate Tech

68.66

-17.95

-20.73%

SMCI

Super Micro Computer

33.00

-59.85

-64.46%

WDC

Western Digital

31.16

-23.96

-43.47%

Dell Technologies Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -30.45% | Next Earnings Date: May 29, 2025

Earnings Call Sentiment Positive

Dell Technologies showed strong financial performance in FY '25, with significant growth in revenue and EPS. The AI business and ISG are major growth drivers, and the company is optimistic about its FY '26 outlook, expecting substantial growth in AI server shipments. However, challenges persist in the consumer market, and there is a competitive pricing environment that could impact margins.

Highlights

Strong Fiscal Year 2025 Performance

Dell Technologies reported FY '25 revenue of $95.6 billion, up 8%, and operating income of $8.5 billion. Record EPS was at $8.14, up 10%, with a cash flow of $4.5 billion.

AI Business Growth

Dell's AI business grew to $10 billion. AI orders demand was $1.7 billion in Q4 with $2.1 billion in shipments, and an AI backlog of roughly $9 billion.

Infrastructure Solutions Group (ISG) Growth

ISG revenue was $11.4 billion, up 22%. Servers and networking revenue hit a Q4 record at $6.6 billion, up 37%.

Dividend and Share Repurchase Program

Dell announced an 18% increase in their annual dividend to $2.10 per share and a $10 billion increase in share repurchase authorization.

Guidance for FY '26

Dell expects FY '26 revenue between $101 billion and $105 billion, with ISG to grow in high teens and CSG to grow low to mid-single digits. AI server shipments are projected to hit $15 billion.

Lowlights

Consumer Market Challenges

Consumer revenue was down 12% to $1.9 billion in Q4, with the demand environment remaining soft and profitability challenged.

Competitive Pricing Environment Impact

Gross margin was down 50 basis points due to a competitive pricing environment, particularly affecting CSG.

Tariff and Regulatory Uncertainty

The transcript highlighted concerns regarding potential impacts from tariffs and dynamic trade regulations, which could affect pricing and supply chain.

Company Guidance

During Dell Technologies' fiscal year 2025 fourth-quarter earnings call, the company provided guidance for FY '26, anticipating revenue between $101 billion and $105 billion, with a midpoint growth of 8%. Dell expects its Infrastructure Solutions Group (ISG) to grow in the high teens, driven by at least $15 billion in AI server shipments. Meanwhile, the Client Solutions Group (CSG) is projected to grow low to mid-single digits, more weighted towards the second half of the year. Despite an anticipated decline in the gross margin rate by approximately 100 basis points due to a higher mix of AI-optimized servers, operating expenses are expected to decrease by low single digits year-over-year. Dell forecasts diluted non-GAAP EPS to increase by 14% to $9.30, plus or minus $0.25, with FY '26 Q1 revenue expected to be between $22.5 billion and $23.5 billion, representing a 3% increase at the midpoint.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.