Prediction: This Artificial Intelligence (AI) Stock Is Going to Soar Higher After Nov. 26

Core Viewpoint - Dell Technologies has experienced a significant stock market rally in 2024, with a 76% increase attributed to rising demand for its AI server solutions [1] Financial Performance and Expectations - Dell is set to release its fiscal 2025 third-quarter results on November 26, 2024, which will be crucial for sustaining its stock rally [2] - The company guided for fiscal Q3 revenue of $24.5 billion, representing a 10% increase from the same quarter last year [3] - Adjusted earnings are expected to be $2 per share, while consensus estimates predict $2.04 per share on revenue of $24.7 billion [4] AI Server Demand and Market Position - In fiscal Q2, Dell sold $3.2 billion worth of AI servers, up from $2.6 billion in Q1, and ended Q2 with an AI server order backlog of $3.8 billion [5] - Dell's potential revenue pipeline for AI servers has significantly increased, suggesting strong future performance if supply chain issues are resolved [5] - Dell is likely to benefit from issues faced by rival Super Micro Computer, which has seen a decline in orders due to negative news [6][7] Competitive Landscape - Supermicro's customers, including Elon Musk's xAI, have reportedly shifted $6 billion worth of AI server orders away from the company, potentially benefiting Dell [7][8] - Dell commands half of the AI server orders from Musk-led companies, positioning it well to capture market share if Supermicro continues to lose orders [8] Long-term Market Outlook - The global AI server market is projected to reach $177 billion in annual revenue by 2032, up from $38 billion last year, indicating a strong growth trajectory for Dell [9] - Dell's management has indicated a solid pipeline of customers for AI servers that exceeds its backlog, suggesting potential for long-term revenue and earnings growth [10] Earnings Forecast - Dell's earnings in fiscal 2024 fell 6% to $7.13 per share, but the company expects to improve to $7.80 per share in fiscal 2025, marking a 9% increase [11] - EPS estimates for the next two fiscal years are projected at $9.43 and $10.76, indicating a positive outlook for earnings growth [12] Valuation - Dell is currently trading at 25 times trailing earnings and 13 times forward earnings, suggesting it may be undervalued as an AI stock [13]