DELL Stock Soars 24% in the Past 6 Months: Should You Buy Now or Wait?

Core Insights - Dell Technologies (DELL) shares have increased by 24.3% over the past six months, lagging behind the Zacks Computer & Technology sector's 27.7% return and the Computer - Micro Computers industry's 40.8% growth [1][9] - The underperformance is attributed to supply-chain constraints and competitive pressures in the PC and AI server markets [2][19] - Strong demand for AI servers is benefiting Dell, driven by digital transformation and interest in generative AI applications [2][19] Dell's Performance and Growth - Dell's Infrastructure Solutions Group (ISG) revenue grew by 24% year over year to $14.10 billion in Q3 of fiscal 2026, marking seven consecutive quarters of double-digit growth [5][9] - The company recorded $12.3 billion in AI server orders in Q3, totaling $30 billion year-to-date, with $5.6 billion worth of AI servers shipped in the same quarter [6][9] - Dell ended Q3 with a record backlog of $18.4 billion in AI server orders, indicating sustained demand from a diverse customer base [7][9] - For Q4 of fiscal 2026, revenues are projected between $31 billion and $32 billion, suggesting a 32% year-over-year growth [10] - Non-GAAP earnings for Q4 are expected to be $3.50 per share, indicating a 31% growth year over year [11] Fiscal 2026 Guidance - For fiscal 2026, revenues are anticipated to be between $111.2 billion and $112.2 billion, reflecting a 17% year-over-year growth [12] - Non-GAAP earnings are expected to be $9.92 per share, up 22% year over year [13] Valuation and Competition - Dell shares are considered undervalued, with a forward 12-month Price/Sales ratio of 0.78X compared to the sector's 6.73X [14] - Despite its strengths, Dell faces stiff competition from companies like Cisco Systems, Hewlett-Packard, and Super Micro Computers in the AI infrastructure space [16][19] - Cisco Systems reported over $1.3 billion in AI Infrastructure orders in Q1 of fiscal 2026, while Super Micro Computer is noted for being first to market with the latest AI servers [17][18]