Dell stock has underperformed the market in 2025, despite growth acceleration driven by a strong presence in the AI server market. Valuation is deemed attractive, making it a potentially smart investment.

Dell reported record revenue of $29.8 billion, a 19% increase year-over-year, with non-GAAP earnings at $2.32 per share. Though earnings guidance for the current quarter is lower than expected, margins are expected to improve.

Expectations for Dell’s adjusted earnings to rise by 17% in fiscal 2026 and revenue guidance to increase by 12% underscore the company’s growth potential in the AI server market.

Dell’s robust AI server business, with record shipments and growing demand, positions the company to exceed its $20 billion AI server revenue target for the year.

Analysts project Dell’s stock price could potentially triple if it reaches $12.26 per share in earnings. Dell is currently undervalued at 13 times forward earnings, presenting an opportunity for investors seeking growth.

While Dell Technologies is not among the 10 best stocks identified by the Motley Fool Stock Advisor team, its potential for long-term growth in the AI server market is promising, with substantial undervaluation.

Investors considering Dell should note the potential for significant earnings growth and value in the stock, which is trading at an attractive multiple compared to its growth prospects.

The Motley Fool has no position in Dell Technologies, but its analysis suggests Dell’s stock has strong growth potential in the AI server market.

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