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DELL stock has also underperformed its peer, Hewlett-Packard (HPE - Free Report) , which is also expanding its footprint in the server space. Hewlett-Packard shares have rallied 28.1% year to date.
The underperformance can be attributed to weaker demand for traditional servers and storage in North America, slower federal spending, and declining consumer PC revenue. Supply-chain costs and competitive pressures in the AI market are also impacting profitability.
DELL Stock Performance
Image Source: Zacks Investment Research
However, Dell Technologies is benefiting from strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications.
Dell Benefits From Expanding Portfolio
Dell Technologies’ expanding portfolio has been a key catalyst. Its leadership in AI-optimized servers is a key driver of growth. The company shipped $8.2 billion in AI servers in the second quarter of fiscal 2026. The AI-optimized server momentum saw a $5.6 billion increase in orders. The company’s AI backlog of $11.7 billion exiting the second quarter of fiscal 2026 and a growing opportunity pipeline further underscore the sustained demand for its solutions.
The company has achieved significant growth in AI-optimized server shipments, delivering $10 billion worth of these servers in the first half of fiscal 2026 alone. The company projects $20 billion in AI server shipments for fiscal 2026, highlighting its strong momentum in the AI infrastructure space.
Building on this momentum in the second quarter of fiscal 2026, Infrastructure Solutions Group (ISG) revenues increased 44% year over year to $16.80 billion, marking six consecutive quarters of double-digit growth. Servers and networking revenues of $12.94 billion grew 69% year over year, highlighting the strength across both artificial intelligence (AI) and traditional server markets.
Further expanding its portfolio in August 2025, the company updated its AI Data Platform with enhanced capabilities for unstructured data ingestion, vector search, and GPU-accelerated compute to streamline enterprise AI workloads and semantic search.
DELL Benefits From Expanding Clientele
DELL is benefiting from an expanding partner base that includes Lowe’s Companies (LOW - Free Report) , NVIDIA (NVDA - Free Report) , Worley, Microsoft, Meta Platforms, Advanced Micro Devices, and Imbue.
In August 2025, Dell announced significant updates to its AI Data Platform, improving unstructured data ingestion, semantic retrieval, and GPU-accelerated inferencing. With new Dell PowerEdge servers featuring NVIDIA RTX PRO 6000 Blackwell GPUs and Elastic integration, the platform allows businesses to scale generative AI with faster performance and turnkey deployment.
In June 2025, Dell Technologies partnered with Lowe’s to enhance customer and associate experiences by deploying advanced AI and PC technologies. Using Dell AI Factory with NVIDIA and high-performance Dell devices, Lowe’s is optimizing inventory, improving asset protection, and streamlining store operations across its network.
Dell Technologies’ innovative portfolio, expanding partner base, and growing AI footprint are significant growth drivers.
For the third quarter of fiscal 2026, revenues are expected to be between $26.5 billion and $27.5 billion, with the mid-point of $27 billion suggesting 11% year-over-year growth.
The Zacks Consensus Estimate for Dell Technologies’ third-quarter fiscal 2026 revenues is pegged at $27.13 billion, suggesting growth of 11.33% year over year.
Non-GAAP earnings are expected to be $2.45 per share (+/- 10 cents), at the midpoint, indicating 11% growth year over year. The Zacks Consensus Estimate for earnings is pegged at $2.48 per share, which has decreased 1.19% over the past 30 days. This indicates year-over-year growth of 15.35%.
Dell Technologies shares are cheap, as suggested by a Value Score of B.
Dell Technologies’ stock is trading at a significant discount with a forward 12-month P/S of 0.75X compared with the Computer - Micro Computers industry’s 7.73X and Hewlett-Packard’s 0.79X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
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.
DELL stock currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Dell Technologies Gains 6% in 3 Months: Time to Buy the Stock?
Key Takeaways
Dell Technologies (DELL - Free Report) shares have gained 6.5% year to date, underperforming the broader Zacks Computer and Technology sector’s increase of 12.8%. The Zacks Computer - Micro Computers industry has surged 18.1% in the same time frame.
DELL stock has also underperformed its peer, Hewlett-Packard (HPE - Free Report) , which is also expanding its footprint in the server space. Hewlett-Packard shares have rallied 28.1% year to date.
The underperformance can be attributed to weaker demand for traditional servers and storage in North America, slower federal spending, and declining consumer PC revenue. Supply-chain costs and competitive pressures in the AI market are also impacting profitability.
DELL Stock Performance
Image Source: Zacks Investment Research
However, Dell Technologies is benefiting from strong demand for AI servers driven by ongoing digital transformation and heightened interest in generative AI applications.
Dell Benefits From Expanding Portfolio
Dell Technologies’ expanding portfolio has been a key catalyst. Its leadership in AI-optimized servers is a key driver of growth. The company shipped $8.2 billion in AI servers in the second quarter of fiscal 2026. The AI-optimized server momentum saw a $5.6 billion increase in orders. The company’s AI backlog of $11.7 billion exiting the second quarter of fiscal 2026 and a growing opportunity pipeline further underscore the sustained demand for its solutions.
The company has achieved significant growth in AI-optimized server shipments, delivering $10 billion worth of these servers in the first half of fiscal 2026 alone. The company projects $20 billion in AI server shipments for fiscal 2026, highlighting its strong momentum in the AI infrastructure space.
Building on this momentum in the second quarter of fiscal 2026, Infrastructure Solutions Group (ISG) revenues increased 44% year over year to $16.80 billion, marking six consecutive quarters of double-digit growth. Servers and networking revenues of $12.94 billion grew 69% year over year, highlighting the strength across both artificial intelligence (AI) and traditional server markets.
Further expanding its portfolio in August 2025, the company updated its AI Data Platform with enhanced capabilities for unstructured data ingestion, vector search, and GPU-accelerated compute to streamline enterprise AI workloads and semantic search.
DELL Benefits From Expanding Clientele
DELL is benefiting from an expanding partner base that includes Lowe’s Companies (LOW - Free Report) , NVIDIA (NVDA - Free Report) , Worley, Microsoft, Meta Platforms, Advanced Micro Devices, and Imbue.
In August 2025, Dell announced significant updates to its AI Data Platform, improving unstructured data ingestion, semantic retrieval, and GPU-accelerated inferencing. With new Dell PowerEdge servers featuring NVIDIA RTX PRO 6000 Blackwell GPUs and Elastic integration, the platform allows businesses to scale generative AI with faster performance and turnkey deployment.
In June 2025, Dell Technologies partnered with Lowe’s to enhance customer and associate experiences by deploying advanced AI and PC technologies. Using Dell AI Factory with NVIDIA and high-performance Dell devices, Lowe’s is optimizing inventory, improving asset protection, and streamlining store operations across its network.
Dell Technologies Offers Positive Q3 FY26 Guidance
Dell Technologies’ innovative portfolio, expanding partner base, and growing AI footprint are significant growth drivers.
For the third quarter of fiscal 2026, revenues are expected to be between $26.5 billion and $27.5 billion, with the mid-point of $27 billion suggesting 11% year-over-year growth.
The Zacks Consensus Estimate for Dell Technologies’ third-quarter fiscal 2026 revenues is pegged at $27.13 billion, suggesting growth of 11.33% year over year.
Non-GAAP earnings are expected to be $2.45 per share (+/- 10 cents), at the midpoint, indicating 11% growth year over year. The Zacks Consensus Estimate for earnings is pegged at $2.48 per share, which has decreased 1.19% over the past 30 days. This indicates year-over-year growth of 15.35%.
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 Technologies’ stock is trading at a significant discount with a forward 12-month P/S of 0.75X compared with the Computer - Micro Computers industry’s 7.73X and Hewlett-Packard’s 0.79X.
Price/Sales (F12M)
Image Source: Zacks Investment Research
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.
DELL stock currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.