Dell Technologies (DELL) AI Stock Analysis

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Dell Technologies

(NYSE:DELL)

Rating:72Outperform

Price Target:

$120.00

▲(5.50%Upside)

Dell Technologies' stock is supported by strong growth in AI demand and consistent cash generation, as highlighted in the earnings call. However, high financial leverage and competitive market challenges temper the outlook. The technical indicators suggest moderate upward momentum, while fair valuation aligns with the industry average.

Positive Factors

AI Market Demand

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

Capital Return Strategy

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

Revenue Guidance

Sales guidance for the next quarter suggests significant growth compared to Street estimates.

Negative Factors

Inventory Management

Dell's Finished Goods balance stood at $941M exiting F1Q26, down from $1.156B exiting FY25, which may indicate inventory management challenges.

Macro Headwinds

Management noted macro headwinds, especially in North America, affecting traditional server and storage outlook.

Market Growth Outlook

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

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

Market Cap

$74.36B

Dividend Yield1.92%

Average Volume (3M)6.10M

Price to Earnings (P/E)17.5

Beta (1Y)2.09

Revenue Growth7.68%

EPS Growth27.73%

CountryUS

Employees108,000

SectorTechnology

Sector Strength84

IndustryComputer Hardware

Share Statistics

EPS (TTM)1.55

Shares Outstanding339,719,020

10 Day Avg. Volume5,965,690

30 Day Avg. Volume6,097,064

Financial Highlights & Ratios

PEG Ratio-0.23

Price to Book (P/B)-9.93

Price to Sales (P/S)0.00

P/FCF Ratio55.17

Enterprise Value/Market Cap0.83

Enterprise Value/Revenue0.16

Enterprise Value/Gross Profit2.89

Enterprise Value/Ebitda1.70

Forecast

1Y Price Target

$136.07

Price Target Upside19.63% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering15

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: 0.10%|

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 shows strong revenue and cash flow growth, with stable cash flows and profitability. However, high financial leverage and negative equity pose significant risks, impacting the overall financial stability.

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.

TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
96.70B	95.57B	88.42B	102.30B	101.20B	86.67B
	Gross Profit
21.38B	21.25B	20.87B	22.69B	21.89B	20.14B
	EBIT
6.48B	6.24B	5.41B	5.77B	4.66B	3.69B
	EBITDA
9.05B	9.59B	8.89B	7.66B	12.02B	9.79B
	Net Income Common Stockholders
4.60B	4.59B	3.39B	2.44B	5.56B	3.25B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.70B	3.63B	7.37B	8.88B	10.01B	10.34B
	Total Assets
86.87B	79.75B	82.09B	89.61B	92.73B	123.42B
	Total Debt
28.78B	24.57B	25.99B	29.59B	27.96B	40.45B
	Net Debt
21.08B	20.93B	18.63B	20.98B	17.95B	30.10B
	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
1.42B	1.87B	5.92B	562.00M	7.51B	9.32B
	Operating Cash Flow
3.48B	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 Price113.74

Price Trends

50DMA

99.67

Positive

100DMA

100.71

Positive

200DMA

110.36

Positive

Market Momentum

MACD

2.84

Positive

RSI

58.94

Neutral

STOCH

49.24

Neutral

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 113.74 is above the 20-day moving average (MA) of 112.54, above the 50-day MA of 99.67, and above the 200-day MA of 110.36, indicating a bullish trend. The MACD of 2.84 indicates Positive momentum. The RSI at 58.94 is Neutral, neither overbought nor oversold. The STOCH value of 49.24 is Neutral, 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTAP	79 Outperform	$20.88B	18.36	108.51%	2.07%	5.02%	22.19%
SMCI	78 Outperform	$26.07B	24.11	21.03%	―	82.10%	6.35%
DELL	72 Outperform	$74.36B	17.47	-179.12%	1.92%	7.68%	27.73%
WDC	70 Neutral	$20.03B	10.92	28.45%	0.72%	21.22%	―
STX	65 Neutral	$27.01B	18.39	-109.27%	2.26%	36.29%	―
Sector *	62 Neutral	$11.97B	10.29	-7.47%	2.99%	7.32%	-8.06%
HPQ	61 Neutral	$23.03B	9.45	84.33%	4.86%	2.08%	-12.41%

* Technology Sector Average

Performance Comparison

DELL

Dell Technologies

113.74

-32.84

-22.40%

HPQ

24.52

-10.85

-30.68%

NTAP

NetApp

104.20

-22.07

-17.48%

STX

Seagate Tech

131.04

28.07

27.26%

SMCI

Super Micro Computer

43.69

-48.31

-52.51%

WDC

Western Digital

57.41

-3.10

-5.12%

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.