Dell Technologies (DELL) AI Stock Analysis

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Dell Technologies

(NYSE:DELL)

Rating:70Outperform

Price Target:

$128.00

▲(4.40%Upside)

Dell Technologies' stock is bolstered by strong technical indicators and positive earnings call sentiment. Financial performance is a mixed bag, with strengths in revenue growth and cash flow offset by balance sheet concerns. Valuation is moderate, making the stock reasonably attractive, but not a standout in its sector. The absence of significant corporate events leaves the focus on core financial and market performance.

Positive Factors

AI Server Growth

Dell's AI-optimized server backlog grew significantly, suggesting strong demand and growth potential in the AI sector.

Financial Health

Dell's capital return strategy includes significant share repurchases and dividend increases, reflecting confidence in financial health.

Revenue and Backlog

Dell exited F1Q26 with an RPO balance of ~$49B, showing a strong order backlog and future revenue potential.

Negative Factors

Cost Pressures

Greater AI server mix means added margin pressure.

Earnings Outlook

DELL lowered its F2026 EBIT outlook to $9.1-$9.5 bn on slower market growth assumptions across traditional servers, PCs, and storage.

Government Spending

Dell shares came under pressure following reports that the Federal government is looking for opportunities to cut costs.

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

Market Cap

$84.17B

Dividend Yield1.69%

Average Volume (3M)6.30M

Price to Earnings (P/E)19.8

Beta (1Y)2.08

Revenue Growth7.68%

EPS Growth27.73%

CountryUS

Employees108,000

SectorTechnology

Sector Strength88

IndustryComputer Hardware

Share Statistics

EPS (TTM)1.55

Shares Outstanding339,719,020

10 Day Avg. Volume6,238,400

30 Day Avg. Volume6,297,566

Financial Highlights & Ratios

PEG Ratio38.48

Price to Book (P/B)-27.60

Price to Sales (P/S)0.00

P/FCF Ratio22.43

Enterprise Value/Market Cap1.22

Enterprise Value/Revenue0.27

Enterprise Value/Gross Profit4.81

Enterprise Value/Ebitda2.75

Forecast

1Y Price Target

$136.73

Price Target Upside11.53% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering16

Dell Technologies Business Overview & Revenue Model

Company DescriptionDell Technologies Inc. is a multinational technology company that provides a broad range of technology and services solutions. Headquartered in Round Rock, Texas, Dell Technologies operates in various sectors including computer hardware, software, IT services, and IT consulting. The company's core products and services include personal computers, servers, data storage solutions, network switches, software, computer peripherals, HDTVs, cameras, printers, and electronics built by other manufacturers. Dell Technologies is known for its commitment to innovation and customer-centric solutions that empower individuals and organizations to achieve more.

How the Company Makes MoneyDell Technologies makes money primarily through the sale of its hardware products, such as personal computers, laptops, and servers, which constitute a significant portion of its revenue. The company also generates revenue from its infrastructure solutions group that offers enterprise-level data storage and network solutions. Additionally, Dell Technologies provides a variety of IT and business services, including cloud services, cybersecurity solutions, and enterprise support services. These services are often offered through long-term contracts and partnerships with other technology providers. The company's focus on direct sales, especially through its online platform, and strategic partnerships with businesses and governmental organizations also play a crucial role in its revenue generation. Furthermore, Dell Technologies benefits from a strong global presence and its ability to offer end-to-end solutions that cater to both individual consumers and large enterprises.

Dell Technologies Key Performance Indicators (KPIs)

Any

EBIT by Segment

EBIT by Segment
Shows earnings before interest and taxes for each business segment, providing insight into the operational efficiency and profitability of different parts of the company.

Chart InsightsDell Technologies' Infrastructure Solutions Group (ISG) is experiencing robust growth, with a significant uptick in EBIT, driven by strong demand for AI server shipments. This aligns with the company's optimistic outlook for FY '26, expecting high-teens growth in ISG. In contrast, the Client Solutions Group (CSG) is facing challenges with softer consumer demand and competitive pricing pressures, leading to a more modest EBIT trajectory. Despite these challenges, Dell's strategic focus on AI and infrastructure positions it well for future growth, as highlighted in their earnings call.

Data provided by:

Main Street Data

Dell Technologies Earnings Call Summary

Earnings Call Date:May 29, 2025

(Q1-2026)

% Change Since: 7.89%|

Next Earnings Date:Aug 28, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in AI demand, ISG and CSG segments, and record cash generation, indicating a positive performance. However, challenges in the consumer market, competitive pricing, and moderated demand in traditional servers present areas of concern.

Q1-2026 Updates

Positive Updates

Revenue and Earnings Growth

Revenue reached $23.4 billion, up 5% from the previous year. Earnings per share increased by 17% to $1.55, growing three times faster than revenue.

Strong AI Demand

Dell experienced unprecedented demand for AI-optimized servers, booking $12.1 billion in orders in the first quarter and shipping $1.8 billion.

ISG and CSG Growth

ISG and CSG segments both grew 8%. ISG revenue was $10.3 billion, up 12%, and servers and networking revenue hit a Q1 record of $6.3 billion, up 16%.

Record Cash Generation

Dell achieved record Q1 cash flow from operations of $2.8 billion, driven by profitability and working capital improvement.

Commercial PC Growth

Commercial revenue increased by 9% to $11 billion, with strong demand in North America, EMEA, and APJ.

Continued Growth in Storage

Storage revenue increased 6%, marking the third consecutive quarter of growth with strong demand in Dell IP portfolio and PowerStore.

Significant Shareholder Returns

Dell returned $2.4 billion of capital to shareholders, reflecting confidence in business and disciplined capital allocation.

Negative Updates

Consumer Market Challenges

Consumer revenue declined 19%, with the market remaining competitive and pricing aggressive.

Softness in Traditional Servers

Demand environment for traditional servers moderated, with a slowdown in North America impacting margins.

Competitive Pricing Environment

Gross margin was down 80 basis points due to a competitive pricing environment, predominantly in CSG.

Geographical Mix Impact

Lower mix of North American traditional servers, which are higher margin, affected overall profitability.

Company Guidance

During Dell Technologies' Fiscal Year 2026 First Quarter Financial Results Conference Call, comprehensive guidance was provided, highlighting a 5% increase in revenue to $23.4 billion, driven by an 8% growth in both ISG and CSG sectors. The company recorded a 17% increase in earnings per share to $1.55 and generated record cash flow from operations of $2.8 billion. Dell booked $12.1 billion in AI orders, surpassing FY 2025 shipments, with $1.8 billion shipped and a $400 million backlog. The call emphasized strong demand for AI-optimized servers and projected shipments of $7 billion in AI servers for Q2. For FY 2026, Dell expects revenue between $101 billion and $105 billion, with ISG projected to grow in high teens, driven by over $15 billion in AI server shipments. The company raised its full-year EPS guidance to $9.4, reflecting a 15% increase, and highlighted ongoing investments in AI innovation and strategic partnerships.

Dell Technologies Financial Statement Overview

Summary

Dell Technologies exhibits solid revenue growth and profitability with a notable increase in free cash flow, but faces challenges with high leverage and negative stockholders' equity. The income statement reflects strong revenue growth and a stable profitability level, while the balance sheet reveals financial stability concerns due to high debt. Cash flow indicates efficient cash conversion, albeit with potential risks from reliance on free cash flow.

Income Statement

Positive

Dell Technologies shows strong revenue growth with a TTM (Trailing-Twelve-Months) revenue increase of 1.19% compared to the previous annual period. The gross profit margin stands at 22.11%, and the net profit margin is 4.75%, indicating a stable profitability level. However, the EBIT margin of 6.71% and EBITDA margin of 9.36% suggest room for improvement in operational efficiency.

Balance Sheet

Neutral

The balance sheet reveals high leverage, as seen in the negative stockholders' equity and a debt-to-equity ratio that cannot be calculated due to negative equity. The return on equity (ROE) is also affected by the negative equity. Despite these concerns, the company maintains a reasonable level of total assets at $86.87 billion.

Cash Flow

Positive

The cash flow statement shows a healthy free cash flow growth of 95.36% in the TTM compared to the previous annual period. The operating cash flow to net income ratio is 1.36, and the free cash flow to net income ratio is 0.79, indicating efficient cash conversion. However, the reliance on free cash flow may pose risks if operating cash flow fluctuates.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	96.70B	95.57B	88.42B	102.30B	101.20B	86.67B
Gross Profit	21.38B	21.25B	21.07B	22.69B	21.89B	20.14B
EBITDA	10.06B	9.59B	8.89B	7.66B	12.02B	9.79B
Net Income	4.60B	4.59B	3.39B	2.44B	5.56B	3.25B
Balance Sheet
Total Assets	86.87B	79.75B	82.09B	89.61B	92.73B	123.42B
Cash, Cash Equivalents and Short-Term Investments	7.70B	3.63B	7.37B	8.88B	10.01B	10.34B
Total Debt	28.78B	24.57B	25.99B	29.59B	27.96B	40.45B
Total Liabilities	89.89B	81.13B	84.40B	92.64B	94.31B	115.39B
Stockholders Equity	-3.02B	-1.48B	-2.23B	-3.12B	-1.69B	2.95B
Cash Flow
Free Cash Flow	3.65B	1.87B	5.92B	562.00M	7.51B	9.32B
Operating Cash Flow	6.27B	4.52B	8.68B	3.56B	10.31B	11.41B
Investing Cash Flow	-1.85B	-2.21B	-2.78B	-3.02B	1.31B	-460.00M
Financing Cash Flow	-2.50B	-5.82B	-7.09B	-1.63B	-16.61B	-5.95B

Dell Technologies Technical Analysis

Technical Analysis Sentiment

Positive

Last Price122.60

Price Trends

50DMA

107.06

Positive

100DMA

102.13

Positive

200DMA

110.94

Positive

Market Momentum

MACD

4.33

Negative

RSI

64.50

Neutral

STOCH

80.85

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DELL, the sentiment is Positive. The current price of 122.6 is above the 20-day moving average (MA) of 115.86, above the 50-day MA of 107.06, and above the 200-day MA of 110.94, indicating a bullish trend. The MACD of 4.33 indicates Negative momentum. The RSI at 64.50 is Neutral, neither overbought nor oversold. The STOCH value of 80.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (69)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTAP	79 Outperform	$21.18B	18.63	108.51%	1.97%	5.02%	22.19%
SMCI	77 Outperform	$28.40B	27.05	21.03%	―	82.10%	6.35%
DELL	70 Outperform	$84.17B	19.77	-179.12%	1.69%	7.68%	27.73%
Sector *	69 Neutral	¥231.71B	14.67	7.64%	2.71%	9.09%	8.52%
WDC	63 Neutral	$22.08B	12.17	28.45%	0.16%	21.22%	―
HPQ	61 Neutral	$23.27B	9.55	84.33%	4.67%	2.08%	-12.41%
STX	61 Neutral	$30.02B	20.44	-109.27%	2.04%	36.29%	―

* Technology Sector Average

Performance Comparison

DELL

Dell Technologies

122.60

-18.40

-13.05%

HPQ

24.46

-9.04

-26.99%

NTAP

NetApp

106.55

-20.87

-16.38%

STX

Seagate Tech

144.33

44.00

43.86%

SMCI

Super Micro Computer

49.01

-34.71

-41.46%

WDC

Western Digital

63.99

5.12

8.70%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 20, 2025