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

Core Insights - Dell Technologies (DELL) shares are undervalued with a Value Score of A and a forward 12-month P/S ratio of 0.77X compared to the sector average of 6.36X [1][10] - Despite a year-to-date increase of 1.2%, DELL has underperformed the Zacks Computer and Technology sector, which saw a 1.6% increase, due to macroeconomic challenges and competition [3][5] - The broader PC market recovery is slower than anticipated, with customers delaying purchases and a competitive pricing environment impacting profitability [4] Financial Performance - DELL's AI server orders surged to $12.1 billion in Q1 FY26, with $1.8 billion shipped and a backlog of $14.4 billion, indicating strong future growth potential [10][15] - For Q2 FY26, revenues are projected between $28.5 billion and $29.5 billion, suggesting a 16% year-over-year growth, with a consensus estimate of $29.09 billion [17] - Non-GAAP earnings are expected to be $2.25 per share, indicating a 15% growth at the mid-point, with a consensus estimate of $2.26 per share reflecting a 19.58% year-over-year growth [18] Strategic Partnerships and Innovations - DELL is expanding its partner base, including collaborations with Lowe's, NVIDIA, and Worley, enhancing customer experiences and driving innovation [8][11][13] - The company is focusing on AI infrastructure, with advancements in the Dell AI Factory and the introduction of next-generation PowerEdge servers to accelerate enterprise AI adoption [12][14] - The demand for AI-optimized servers is a key growth driver, supported by strong enterprise interest in generative AI applications [14]