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Does Dell Technologies (DELL) Strong Portfolio Makes It a Buy?

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Dell Technologies (DELL - Free Report) shares are up 90.2% year to date compared with the Zacks Computer & Technology sector's rise of 16.5%. The uptick can be attributed to DELL’s commitment to leading the AI PC revolution, enhancing productivity, efficiency and creativity with advanced AI-powered devices and infrastructure offerings.

Dell is expanding its AI offerings with the introduction of the most advanced Copilot + PCs powered by Snapdragon X Elite and Snapdragon X Plus processors.

The product lineup includes five new laptops — XPS 13, Inspiron 14 Plus, Inspiron 14, Latitude 7455 and Latitude 5455. The expansion positions Dell at the forefront in transforming the AI PC experience, making it more seamless, efficient, and secure for all users.

By integrating AI capabilities locally on the devices through Qualcomm’s custom-integrated Oryon central processing unit, premium GPU and neural processing unit (NPU), the company is set to deliver advanced battery life and 45 trillion operations per second of performance on the NPU.


Dell Rides On Strong Portfolio, Partner Base

Dell is benefiting from strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications. Its PowerEdge XE9680 AI-optimized server is very much in demand. Dell’s AI-optimized server momentum saw a sequential increase of approximately 40% in orders in fourth-quarter 2024.

It is witnessing demand from a diverse customer base that includes the likes of higher education institutions, financial services, health care and life services and manufacturing.

DELL enhanced its generative AI solutions offerings to include support for the AMD Instinct MI300X accelerator in PowerEdge XE9680 servers and introduced the Dell Validated Design for Generative AI with AMD ROCm-powered AI frameworks.

Expanding partner base that includes the like of NVIDIA (NVDA - Free Report) , Microsoft, Meta Platforms, Nokia (NOK - Free Report) and CrowdStrike (CRWD - Free Report) has been a major growth driver.

It recently expanded its Dell AI Factory with NVIDIA, offering advancements in servers, edge solutions, and services to accelerate AI adoption. The collaboration integrates Dell’s 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 has inked a partnership with Nokia to serve as its preferred infrastructure partner, transitioning Nokia AirFrame customers to Dell PowerEdge servers with Dell global services and support while also offering Nokia’s Digital Automation Cloud solution with Dell NativeEdge for enterprises.

In March, Dell announced an extended partnership with CrowdStrike to integrate Dell’s Managed Detection and Response services with CrowdStrike’s Falcon XDR platform to defend against complex cyberattacks.

The robust portfolio is expected to aid top-line growth in the near term. For first-quarter fiscal 2025, revenues are expected to be between $21 billion and $22 billion, with the midpoint of $21.5 billion indicating 3% growth.

The Zacks Consensus Estimate for Dell’s first-quarter fiscal 2025 revenues is pegged at $21.74 billion, suggesting growth of 3.93% year over year.

DELL expects earnings to be $1.15 per share (+/- 10 cents). The Zacks Consensus Estimate for earnings is pegged at $1.21 per share, increased by a penny in the past 30 days.


We believe Dell’s strong portfolio and expanding partner base make it an attractive stock for investors at the current level.

Dell is trading at a significant discount with a forward 12-month P/E of 17.81X as compared with the Zacks IT Services industry’s 36.11X.

The stock carries a Zacks Rank #2 (Buy) with a Growth Score of A, a combination that offers a good investment opportunity, per the Zacks proprietary methodology. A Momentum Score of B makes DELL further attractive to investors. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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