DELL Expands Portfolio with New AI Solutions: Buy or Hold the Stock?

Dell Technologies DELL is expanding the Dell AI Factory portfolio with new AI PCs, infrastructure, software and services, strengthening its footprint among enterprises. In collaboration with NVIDIA NVDA, Dell is launching new solutions and services under Dell AI Factory that accelerate agentic AI adoption and leverage the latest innovations, including the NVIDIA Blackwell Ultra platform and NVIDIA AI Data Platform.The Dell AI Factory combines DELL’s solutions and services optimized for AI workloads and supports an open ecosystem of partners comprising Meta Platforms, Microsoft and Hugging Face apart from NVIDIA. The latest innovations include Dell Pro Max high-performance AI PCs, new PowerEdge servers and the Dell AI Data Platform with NVIDIA.Although the latest innovations strengthen DELL’s portfolio, are they potent enough to help the stock recover this year? Dell Technologies shares have declined 14.3% year to date, suffering from continuing weakness in the consumer segment of the PC market. Cautious spending by enterprises and large customers on PCs and storage IT has been a concern for DELL’s investors.DELL Stock's Performance Image Source: Zacks Investment Research Let’s find out more about DELL’s latest innovations.Dell Expands AI PC PortfolioThe Dell Pro Max with GB10 AI developer workstation features the NVIDIA GB10 Grace Blackwell chip and a system-on-a-chip based on the NVIDIA Blackwell architecture. Dell Pro Max with GB300 is a high-end server-level PC for AI developers and data scientists. Dell Pro Max with GB300 is powered by the new NVIDIA GB300 Grace Blackwell Ultra Desktop chip.Meanwhile, Dell Pro Max notebooks and desktops are available under several options, including NVIDIA RTX PRO Blackwell Generation GPUs and Intel Core Ultra (Series 2), AMD Ryzen-powered Copilot+ PCs with AI experiences and AMD Threadripper processor.The latest innovations are expected to boost DELL’s footprint in the AI PC market. The company has been losing market share, which decreased 20 basis points to 14.4% in the fourth quarter of 2024, while DELL’s PC shipments declined 0.2% year over year to 9.9 million, as per IDC data. Lenovo maintained the #1 position with 24.5%, trailed by HP HPQ with 14.4%. Apple’s AAPL market share improved from 8.8% in the year-ago quarter to 10.1%, while its shipment increased 10.1% year over year to 7 million Macs.New PowerEdge Servers to Boost DELL’s ProspectsDell PowerEdge supports the NVIDIA Blackwell Ultra platform, including the upcoming NVIDIA HGX B300 NVL16, NVIDIA GB300 NVL72 and NVIDIA RTX PRO 6000 Blackwell Server Edition. Dell PowerEdge XE7740 and XE7745 servers will be available with the Dell AI Factory with NVIDIA. These servers are currently available with up to eight NVIDIA H200 NVL GPUs, which includes a five-year subscription to NVIDIA AI Enterprise software, including NVIDIA NIM and the NVIDIA Llama Nemotron models for reasoning.The new Dell PowerEdge XE8712 server features the GB200 NVL4 platform and supports up to 144 NVIDIA B200 GPUs per Dell IR7000 rack. These liquid-cooled systems are tailored for AI model training and complex HPC simulations.Dell Offers Positive GuidanceDell’s innovative portfolio and growing AI footprint are major growth drivers. The company expects IT spending to grow on strong AI demand, data center modernization and AI PC cycle refresh. DELL expects fiscal 2026 revenues to grow 8% at the mid-point, with the Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) combination growing at 10%. The Zacks Consensus Estimate for DELL’s fiscal 2026 revenues is pegged at $102.91 billion, indicating 7.68% growth over fiscal 2025’s reported figure.DELL expects non-GAAP earnings for fiscal 2026 to grow 14% at the midpoint despite a 100 basis points decline in gross margin rate, flat ISG operating income and declining CSG operating profit.The Zacks Consensus Estimate for DELL’s fiscal 2026 earnings is pegged at $9.34 per share, up 2.9% over the past 30 days and indicates 14.74% from the figure reported in fiscal 2025.DELL’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.13%. Dell Technologies Inc. Price and Consensus Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote Find the latest EPS estimates and surprises on Zacks Earnings Calendar.DELL Shares Trading CheapDell Technologies shares are cheap, as suggested by a Value Score of A. The DELL stock is trading at a significant discount with a forward 12-month P/E of 10.43X compared with the sector’s 23.65X.DELL’s P/E Ratio (F12M) Image Source: Zacks Investment Research What Should Investors Do With DELL Shares?DELL’s robust portfolio and expanding partner base are key drivers that make the stock attractive for long-term investors. The company expects revenues to see a CAGR between 3-4% over the long term, with ISG to see 6-8% growth and CSG 2-3%. Earnings are expected to see a CAGR of more than 8% due to gross margin expansion and disciplined cost management, along with lower share count.DELL targets to return 80% of adjusted free cash flow to shareholders. The company has increased share repurchase authorization by $5 billion and plans to increase dividend payout by 10% through fiscal 2028. Hence, investors who already own the stock may expect DELL's growth prospects to be rewarding over the long term.However, near-term weakness in the PC market is a headwind, along with a challenging macroeconomic environment. Increasing competition in the AI data center market, along with a higher mix of AI-optimized servers, is expected to hurt gross margin expansion in the near term. Technically, DELL shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend.DELL Shares Trade Below 50-Day & 200-Day SMA Image Source: Zacks Investment Research DELL currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report HP Inc. (HPQ): Free Stock Analysis Report Dell Technologies Inc. (DELL): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks