Dell Technologies stock is undervalued with strong growth prospects in AI infrastructure

From Nasdaq: 2025-06-20 10:42:00

Dell Technologies (DELL) shares are undervalued with a Value Score of A and a low forward 12-month P/S ratio of 0.77X compared to the sector’s 6.36X. Despite a 1.2% YTD increase, challenges in the PC market and macroeconomy have impacted performance. However, DELL outperformed the Computer – Micro Computers industry, driven by an expanding partner base.

DELL is flourishing with partnerships including Lowe’s, NVIDIA, Worley, Microsoft, Meta Platforms, AMD, and Imbue. Collaborations with Lowe’s using advanced AI and PC technology aim to enhance customer and associate experiences. Dell’s advancements in the AI Factory with NVIDIA are accelerating enterprise AI adoption and innovation, benefiting from the expanding portfolio.

Dell Technologies’ AI-optimized server demand is growing, with the flagship PowerEdge XE9680L server experiencing high demand. In Q1 FY26, Dell saw $12.1 billion in AI server orders and a $14.4 billion backlog. Dell PowerEdge servers support NVIDIA platforms for AI model training and HPC simulations, driving momentum in the AI space.

Dell Technologies offers positive Q2 FY26 guidance with an expected revenue range of $28.5 billion to $29.5 billion, indicating 16% YoY growth. Non-GAAP earnings are projected at $2.25 per share (+/- 10 cents), a 15% growth at the mid-point. With a Zacks Rank #1 and Growth Score of B, DELL stock presents a strong investment opportunity.

Investors can leverage Dell Technologies’ strong position in AI infrastructure and positive earnings outlook. Despite market challenges, DELL’s growth prospects are robust, making it an attractive investment with a Zacks Rank #1 and favorable Growth Score. The company’s focus on AI-optimized servers and expanding partner network signals long-term strength.



Read more at Nasdaq: Should You Buy, Sell or Hold Dell Technologies Stock at P/S of 0.77X?