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Dell Technologies Stock Surges 23% Year to Date: How to Play
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Key Takeaways
Dell shares are up 23% YTD, driven by AI server demand and an expanding partner network.
Q2 FY26 revenues are projected in the $28.5B-$29.5B range, with up to 20.63% EPS growth year over year.
New AI Data Platform upgrades and NVIDIA-powered servers boost Dell's high-performance AI offerings.
Dell Technologies (DELL - Free Report) shares have gained 23% year to date, outperforming the broader Zacks Computer and Technology sector’s increase of 14.6%. The Zacks Computer - Micro Computers industry has declined 7.6% in the same time frame. The outperformance can be attributed to DELL’s expanding portfolio and rich partner base.
Dell is experiencing significant growth in its AI-related business. The company’s strong demand for AI servers, which is driven by the ongoing digital transformation and heightened interest in generative AI applications, has been noteworthy.
In the first quarter of fiscal 2026, Dell reported record orders of $12.1 billion and a backlog of $14.4 billion, indicating strong demand for its AI products. The company expects to generate more than $15 billion in AI-related revenues in 2025, with a pipeline that continues to grow.
DELL Stock Performance
Image Source: Zacks Investment Research
Dell Benefits From New AI Platform Upgrades
Dell Technologies’ expanding portfolio has been a key catalyst. It recently announced new updates to its AI Data Platform to help businesses handle the entire AI workflow, from collecting and preparing data to running AI searches and answering questions.
The platform now has a new unstructured data engine, built with Elastic, that can quickly search and retrieve information from large amounts of text, images and other unstructured data. It also uses GPU acceleration for faster performance.
Dell is pairing this with its PowerEdge R7725 and R770 servers featuring NVIDIA (NVDA - Free Report) RTX PRO 6000 Blackwell GPUs, which make AI workloads faster and more affordable. Together, these tools give companies a ready-to-use, high-performance AI solution without needing to build it themselves.
DELL Benefits From Expanding Clientele
DELL is benefiting from an expanding partner base that includes Lowe’s Companies (LOW - Free Report) , NVIDIA, Worley, Microsoft, Meta Platforms, Advanced Micro Devices and Imbue.
Dell Technologies recently partnered with Lowe’s to enhance customer and associate experiences through advanced AI and PC technology. Using the Dell AI Factory with NVIDIA, Lowe’s Companies is optimizing inventory, improving asset protection and enriching in-store service. Dell Technologies’ advanced infrastructure and high-performance PCs support innovation, efficiency, and long-term growth across Lowe’s more than 1,700 stores and offices.
Dell Technologies’ innovative portfolio, expanding partner base and growing AI footprint are major growth drivers.
For the second quarter of fiscal 2026, revenues are expected to be between $28.5 billion and $29.5 billion, with a mid-point of $29 billion, suggesting 16% year-over-year growth.
The Zacks Consensus Estimate for Dell Technologies’ second-quarter fiscal 2026 revenues is pegged at $29.23 billion, suggesting growth of 16.78% year over year.
Non-GAAP earnings are expected to be $2.25 per share (+/- 10 cents), indicating 15% growth at the mid-point. The Zacks Consensus Estimate for earnings is pegged at $2.28 per share, which has remained unchanged over the past 30 days. This indicates year-over-year growth of 20.63%.
Dell Technologies shares are cheap, as suggested by a Value Score of B.
Dell’s stock is trading at a significant discount with a forward 12-month P/S of 0.89 compared with the Computer and Technology sector’s 6.83X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
DELL Suffers From Stiff Competition
Despite DELL’s innovative portfolio, expanding partner base, and growing AI footprint, the company is facing stiff competition in the server space from the likes of Hewlett-Packard (HPE - Free Report) and Super Micro Computers.
Hewlett-Packard is benefiting from robust demand for its AI-optimized servers, leading to significant revenue growth in its server segment. In the second quarter of fiscal 2025, Hewlett Packard’s server business grew 6% year over year, reaching $4.06 billion, mainly due to strong demand for its AI servers as well as growth in server systems.
What Should Investors Do With DELL Stock?
Dell Technologies benefits from rising demand for AI-optimized servers and an expanding partner network. The company’s innovation in AI infrastructure and positive earnings outlook support long-term strength.
However, the challenging macroeconomic environment and tariff-related uncertainties do not bode well for Dell’s prospects. Fierce competition in a rapidly evolving tech landscape continues to put pressure on the company.
The company is also facing margin pressure due to a more competitive pricing environment, particularly in its Client Solutions Group (CSG) and traditional servers. In the first quarter of fiscal 2026, the gross margin contracted 80 basis points (bps) year over year to 21.6%. The consumer PC market remains highly promotional, further challenging margins.
Dell Technologies currently has a Zacks Rank #4 (Sell), which implies that investors should avoid investing in this stock at the moment.
Image: Bigstock
Dell Technologies Stock Surges 23% Year to Date: How to Play
Key Takeaways
Dell Technologies (DELL - Free Report) shares have gained 23% year to date, outperforming the broader Zacks Computer and Technology sector’s increase of 14.6%. The Zacks Computer - Micro Computers industry has declined 7.6% in the same time frame. The outperformance can be attributed to DELL’s expanding portfolio and rich partner base.
Dell is experiencing significant growth in its AI-related business. The company’s strong demand for AI servers, which is driven by the ongoing digital transformation and heightened interest in generative AI applications, has been noteworthy.
In the first quarter of fiscal 2026, Dell reported record orders of $12.1 billion and a backlog of $14.4 billion, indicating strong demand for its AI products. The company expects to generate more than $15 billion in AI-related revenues in 2025, with a pipeline that continues to grow.
DELL Stock Performance
Image Source: Zacks Investment Research
Dell Benefits From New AI Platform Upgrades
Dell Technologies’ expanding portfolio has been a key catalyst. It recently announced new updates to its AI Data Platform to help businesses handle the entire AI workflow, from collecting and preparing data to running AI searches and answering questions.
The platform now has a new unstructured data engine, built with Elastic, that can quickly search and retrieve information from large amounts of text, images and other unstructured data. It also uses GPU acceleration for faster performance.
Dell is pairing this with its PowerEdge R7725 and R770 servers featuring NVIDIA (NVDA - Free Report) RTX PRO 6000 Blackwell GPUs, which make AI workloads faster and more affordable. Together, these tools give companies a ready-to-use, high-performance AI solution without needing to build it themselves.
DELL Benefits From Expanding Clientele
DELL is benefiting from an expanding partner base that includes Lowe’s Companies (LOW - Free Report) , NVIDIA, Worley, Microsoft, Meta Platforms, Advanced Micro Devices and Imbue.
Dell Technologies recently partnered with Lowe’s to enhance customer and associate experiences through advanced AI and PC technology. Using the Dell AI Factory with NVIDIA, Lowe’s Companies is optimizing inventory, improving asset protection and enriching in-store service. Dell Technologies’ advanced infrastructure and high-performance PCs support innovation, efficiency, and long-term growth across Lowe’s more than 1,700 stores and offices.
Dell Technologies Offers Positive Q2 FY26 Guidance
Dell Technologies’ innovative portfolio, expanding partner base and growing AI footprint are major growth drivers.
For the second quarter of fiscal 2026, revenues are expected to be between $28.5 billion and $29.5 billion, with a mid-point of $29 billion, suggesting 16% year-over-year growth.
The Zacks Consensus Estimate for Dell Technologies’ second-quarter fiscal 2026 revenues is pegged at $29.23 billion, suggesting growth of 16.78% year over year.
Non-GAAP earnings are expected to be $2.25 per share (+/- 10 cents), indicating 15% growth at the mid-point. The Zacks Consensus Estimate for earnings is pegged at $2.28 per share, which has remained unchanged over the past 30 days. This indicates year-over-year growth of 20.63%.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
DELL Shares Trading Cheap
Dell Technologies shares are cheap, as suggested by a Value Score of B.
Dell’s stock is trading at a significant discount with a forward 12-month P/S of 0.89 compared with the Computer and Technology sector’s 6.83X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
DELL Suffers From Stiff Competition
Despite DELL’s innovative portfolio, expanding partner base, and growing AI footprint, the company is facing stiff competition in the server space from the likes of Hewlett-Packard (HPE - Free Report) and Super Micro Computers.
Hewlett-Packard is benefiting from robust demand for its AI-optimized servers, leading to significant revenue growth in its server segment. In the second quarter of fiscal 2025, Hewlett Packard’s server business grew 6% year over year, reaching $4.06 billion, mainly due to strong demand for its AI servers as well as growth in server systems.
What Should Investors Do With DELL Stock?
Dell Technologies benefits from rising demand for AI-optimized servers and an expanding partner network. The company’s innovation in AI infrastructure and positive earnings outlook support long-term strength.
However, the challenging macroeconomic environment and tariff-related uncertainties do not bode well for Dell’s prospects. Fierce competition in a rapidly evolving tech landscape continues to put pressure on the company.
The company is also facing margin pressure due to a more competitive pricing environment, particularly in its Client Solutions Group (CSG) and traditional servers. In the first quarter of fiscal 2026, the gross margin contracted 80 basis points (bps) year over year to 21.6%. The consumer PC market remains highly promotional, further challenging margins.
Dell Technologies currently has a Zacks Rank #4 (Sell), which implies that investors should avoid investing in this stock at the moment.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.