We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
DELL Trades Close to 52-Week High: Here Is Why the Stock is a Buy
Read MoreHide Full Article
Dell Technologies (DELL - Free Report) shares closed at $241.99 on May 15, close to the 52-week high of $263.99 that the stock hit on May 8. The DELL stock has outperformed the broader Zacks Computer and Technology sector, as well as peers like Apple (AAPL - Free Report) , Super Micro Computer (SMCI - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) . The DELL stock has jumped 92.2% year to date (YTD), while shares of Hewlett Packard Enterprise, Apple and Super Micro Computer have returned 37.8%, 10.4% and 6%, respectively.
Although DELL shares have dropped 8.3%, apparently due to profit-taking and slowing overall growth concerns amid stiff competition, the company’s near-term prospects remain robust due to strong AI infrastructure demand. The company not only boasts strong liquidity but is also trading cheaper, as suggested by a Value Score of B. Let us dig deep to discuss these factors, which make the DELL stock a buy.
DELL Stock’s Price Performance
Image Source: Zacks Investment Research
DELL’s Strong AI Growth Boosts Competitive Prowess
Dell Technologies is benefiting from accelerating AI infrastructure demand. In fiscal 2026, the company recorded more than $64 billion in AI-optimized server orders and shipped above $25 billion worth of AI infrastructure, ending the year with a record backlog of $43 billion. DELL’s AI infrastructure solutions are gaining traction among enterprises, sovereign entities and next-generation cloud providers, with the company serving more than 4,000 AI customers globally.
The company has become a key supplier of AI-optimized servers and data center solutions, benefiting from surging enterprise demand for AI training and inference workloads. Dell Technologies’ partnerships with leading chipmakers such as NVIDIA allow it to deliver high-performance AI systems that enterprises increasingly need to modernize operations and deploy generative AI applications.
The company’s integrated rack-scale systems and data center solutions allow customers to deploy AI clusters efficiently, while managing the total cost of ownership. These capabilities are helping Dell Technologies capture opportunities as organizations scale AI workloads across industries. This is expected to drive top-line growth with AI server revenues to reach $50 billion in fiscal 2027, indicating more than 100% year-over-year growth.
Dell Technologies’ prospects benefit from strong liquidity. In fiscal 2026, the company generated more than $11 billion in operating cash flow and ended fiscal 2026 with $13.3 billion in cash and investments. This healthy cash position allows Dell Technologies to continue investing in strategic areas like AI infrastructure and data center modernization, as well as providing consistent shareholder returns.
In fiscal 2026, the company returned $7.5 billion to shareholders through dividends and share repurchases, including $2.2 billion in the fiscal fourth quarter. DELL also raised its dividend 20% and increased its share repurchase authorization by $10 billion, reflecting confidence in its long-term growth prospects.
DELL Offers Positive 2027 Guidance
For fiscal 2027, revenues are expected between $138 billion and $142 billion, indicating 23% year-over-year growth at the mid-point. The Zacks Consensus Estimate for revenues is pegged at $141.47 billion, suggesting 24.6% growth from the figure reported in fiscal 2026.
For fiscal 2027, non-GAAP earnings are expected to be $12.90 per share (+/- 25 cents) at the mid-point, implying a 25% year-over-year rally. The consensus mark for fiscal 2027 earnings is currently pegged at $12.83 per share, up by a penny over the past 30 days, indicating 24.6% growth from the fiscal 2026 reported figure.
For the first quarter of fiscal 2027, revenues are expected between $34.7 billion and $35.7 billion, with the mid-point of $35.2 billion suggesting 51% year-over-year growth. Dell Technologies anticipates a 53% year-over-year rise at the mid-point for the combined Infrastructure Solutions Group (“ISG”) and Client Solution Group (“CSG”), with ISG expected to grow more than 100%, supported by $13 billion in AI server revenues, and CSG is expected to inch up 2%. The Zacks Consensus Estimate for revenues is pegged at $35.46 billion, suggesting 51.7% growth from the figure reported in the year-ago quarter.
Strong top-line growth is expected to boost profits. Dell Technologies expects first-quarter fiscal 2027 non-GAAP earnings of $2.90 per share (+/- 10 cents) at the mid-point, indicating 87% year-over-year growth. The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings is pegged at $3.18 per share, up by a penny over the past 30 days, indicating a 105.2% surge from the figure reported in the year-ago quarter.
In terms of the forward 12-month price/earnings (P/E), DELL is trading at 18.18X, lower than the broader sector’s 25.7X. Dell Technologies is also trading at a discount against Apple shares, which are currently trading at 32.47X but higher than Super Micro Computer’s 10.08X and Hewlett Packard Enterprise’s 12.92X.
DELL Stock’s Valuation
Image Source: Zacks Investment Research
Technically, Dell Technologies is trading above the 50- day and 200-day moving averages, indicating a bullish trend.
DELL Stock Trades Above 50-Day & 200-Day SMAs
Image Source: Zacks Investment Research
Conclusion
Dell Technologies’ prospects ride on strong AI infrastructure demand, impressive liquidity position and cheap valuation. An expanding clientele across neoclouds, sovereigns and enterprise customers bodes well for the company’s top-line growth. The company’s disciplined approach toward capital spending is a key catalyst.
View the Zacks #1 Rank List
Image: Bigstock
DELL Trades Close to 52-Week High: Here Is Why the Stock is a Buy
Dell Technologies (DELL - Free Report) shares closed at $241.99 on May 15, close to the 52-week high of $263.99 that the stock hit on May 8. The DELL stock has outperformed the broader Zacks Computer and Technology sector, as well as peers like Apple (AAPL - Free Report) , Super Micro Computer (SMCI - Free Report) and Hewlett Packard Enterprise (HPE - Free Report) . The DELL stock has jumped 92.2% year to date (YTD), while shares of Hewlett Packard Enterprise, Apple and Super Micro Computer have returned 37.8%, 10.4% and 6%, respectively.
Although DELL shares have dropped 8.3%, apparently due to profit-taking and slowing overall growth concerns amid stiff competition, the company’s near-term prospects remain robust due to strong AI infrastructure demand. The company not only boasts strong liquidity but is also trading cheaper, as suggested by a Value Score of B. Let us dig deep to discuss these factors, which make the DELL stock a buy.
DELL Stock’s Price Performance
Image Source: Zacks Investment Research
DELL’s Strong AI Growth Boosts Competitive Prowess
Dell Technologies is benefiting from accelerating AI infrastructure demand. In fiscal 2026, the company recorded more than $64 billion in AI-optimized server orders and shipped above $25 billion worth of AI infrastructure, ending the year with a record backlog of $43 billion. DELL’s AI infrastructure solutions are gaining traction among enterprises, sovereign entities and next-generation cloud providers, with the company serving more than 4,000 AI customers globally.
The company has become a key supplier of AI-optimized servers and data center solutions, benefiting from surging enterprise demand for AI training and inference workloads. Dell Technologies’ partnerships with leading chipmakers such as NVIDIA allow it to deliver high-performance AI systems that enterprises increasingly need to modernize operations and deploy generative AI applications.
The company’s integrated rack-scale systems and data center solutions allow customers to deploy AI clusters efficiently, while managing the total cost of ownership. These capabilities are helping Dell Technologies capture opportunities as organizations scale AI workloads across industries. This is expected to drive top-line growth with AI server revenues to reach $50 billion in fiscal 2027, indicating more than 100% year-over-year growth.
Dell Technologies’ prospects benefit from strong liquidity. In fiscal 2026, the company generated more than $11 billion in operating cash flow and ended fiscal 2026 with $13.3 billion in cash and investments. This healthy cash position allows Dell Technologies to continue investing in strategic areas like AI infrastructure and data center modernization, as well as providing consistent shareholder returns.
In fiscal 2026, the company returned $7.5 billion to shareholders through dividends and share repurchases, including $2.2 billion in the fiscal fourth quarter. DELL also raised its dividend 20% and increased its share repurchase authorization by $10 billion, reflecting confidence in its long-term growth prospects.
DELL Offers Positive 2027 Guidance
For fiscal 2027, revenues are expected between $138 billion and $142 billion, indicating 23% year-over-year growth at the mid-point. The Zacks Consensus Estimate for revenues is pegged at $141.47 billion, suggesting 24.6% growth from the figure reported in fiscal 2026.
For fiscal 2027, non-GAAP earnings are expected to be $12.90 per share (+/- 25 cents) at the mid-point, implying a 25% year-over-year rally. The consensus mark for fiscal 2027 earnings is currently pegged at $12.83 per share, up by a penny over the past 30 days, indicating 24.6% growth from the fiscal 2026 reported figure.
For the first quarter of fiscal 2027, revenues are expected between $34.7 billion and $35.7 billion, with the mid-point of $35.2 billion suggesting 51% year-over-year growth. Dell Technologies anticipates a 53% year-over-year rise at the mid-point for the combined Infrastructure Solutions Group (“ISG”) and Client Solution Group (“CSG”), with ISG expected to grow more than 100%, supported by $13 billion in AI server revenues, and CSG is expected to inch up 2%. The Zacks Consensus Estimate for revenues is pegged at $35.46 billion, suggesting 51.7% growth from the figure reported in the year-ago quarter.
Strong top-line growth is expected to boost profits. Dell Technologies expects first-quarter fiscal 2027 non-GAAP earnings of $2.90 per share (+/- 10 cents) at the mid-point, indicating 87% year-over-year growth. The Zacks Consensus Estimate for first-quarter fiscal 2027 earnings is pegged at $3.18 per share, up by a penny over the past 30 days, indicating a 105.2% surge from the figure reported in the year-ago quarter.
Dell Technologies Inc. Price and Consensus
Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote
DELL Shares Are Trading Cheap
In terms of the forward 12-month price/earnings (P/E), DELL is trading at 18.18X, lower than the broader sector’s 25.7X. Dell Technologies is also trading at a discount against Apple shares, which are currently trading at 32.47X but higher than Super Micro Computer’s 10.08X and Hewlett Packard Enterprise’s 12.92X.
DELL Stock’s Valuation
Image Source: Zacks Investment Research
Technically, Dell Technologies is trading above the 50- day and 200-day moving averages, indicating a bullish trend.
DELL Stock Trades Above 50-Day & 200-Day SMAs
Image Source: Zacks Investment Research
Conclusion
Dell Technologies’ prospects ride on strong AI infrastructure demand, impressive liquidity position and cheap valuation. An expanding clientele across neoclouds, sovereigns and enterprise customers bodes well for the company’s top-line growth. The company’s disciplined approach toward capital spending is a key catalyst.
DELL currently has a Zacks Rank #2 (Buy) and a Growth Score of A, 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.