Core Insights - Cisco Systems and Dell Technologies are leading providers of AI-powered enterprise infrastructure solutions [2][3] - The demand for AI infrastructure is driving significant growth in both companies, with Cisco securing over $1 billion in AI infrastructure orders and Dell shipping $1.8 billion in AI servers in Q1 [9][13] - IDC projects AI infrastructure spending to exceed $200 billion by 2028, with a significant portion allocated to servers with embedded accelerators [4] Company Performance - Cisco's stock has appreciated 16.2% year to date, while Dell's shares have increased by 11% [5] - Cisco's security business is thriving, with strong demand for its security solutions and a growing customer base [11][12] - Dell's PowerEdge XE9680L AI-optimized server is in high demand, contributing to a healthy backlog of $14.4 billion [13] Market Trends - Global IT spending is forecasted to reach $5.61 trillion by 2025, with data center systems expected to grow by 23.2% [4] - Enterprises with large-scale hyperscale data centers will account for over 70% of spending on AI-optimized servers by 2025 [4] Valuation and Investment Appeal - Dell Technologies is considered undervalued with a Price/Sales ratio of 0.81X compared to Cisco's 4.61X [18] - Dell holds a Zacks Rank 1 (Strong Buy), while Cisco has a Zacks Rank 3 (Hold), indicating a stronger investment appeal for Dell [21][22]

Core Insights - Dell Technologies (DELL) is showing strong upward momentum, trading above its 200-day and 50-day simple moving averages, indicating price stability and a long-term bullish trend [1][4] - The stock has gained 8% year-to-date, outperforming the broader Zacks Computer and Technology sector, which increased by 7%, while the Zacks Computer - Micro Computers industry declined by 15.6% [5][9] - Strong demand for AI servers and cloud offerings has driven significant revenue growth, with ISG revenue increasing by 12% year-over-year [9][13] Financial Performance - DELL expects Q2 FY26 revenue between $28.5 billion and $29.5 billion, indicating solid double-digit growth [9][18] - Non-GAAP earnings are projected at $2.25 per share, reflecting a 15% growth at the mid-point [19] - The Zacks Consensus Estimate for Q2 FY26 revenues is $29.14 billion, suggesting a year-over-year growth of 16.45% [18] Market Position - DELL's shares are considered undervalued, with a forward 12-month price-to-sales ratio of 0.79X compared to the sector's 6.58X [20] - The company has a Zacks Rank 1 (Strong Buy) and a Growth Score of B, indicating a favorable investment opportunity [23] Strategic Developments - DELL's expanding portfolio includes high-demand AI-optimized servers, contributing to a $12.1 billion increase in orders in the fiscal first quarter of 2026 [11][10] - The company is enhancing its cloud computing footprint through its APEX platform, which provides multi-cloud solutions and advanced AI infrastructure [12][13] - Partnerships with companies like Lowe's and Worley are enhancing DELL's capabilities in AI and cloud services [15][16][17]

Core Insights - Dell Technologies (DELL) and Nutanix (NTNX) are significant players in the cloud infrastructure and hyperconverged infrastructure (HCI) market, with both companies positioned to benefit from the increasing adoption of hybrid cloud solutions [1][2] Dell Technologies - Dell's Infrastructure Solutions Group (ISG) revenues, which include cloud offerings, increased by 12% year over year to $10.31 billion in Q1 FY26 [3][9] - The company is expanding its cloud services through partnerships and infrastructure solutions, including a recent collaboration with Singapore's Institute of Technical Education to launch a hybrid cloud VDI Center [4] - Dell is experiencing strong demand for AI-optimized servers, particularly the PowerEdge XE9680L, driven by digital transformation and interest in generative AI applications [5][9] - Despite a challenging macroeconomic environment, Dell's innovation in AI infrastructure and positive earnings outlook support its long-term strength, with a Zacks Consensus Estimate for fiscal 2026 earnings at $9.44 per share, indicating a 15.97% year-over-year increase [15][16] Nutanix - Nutanix offers software-defined HCI solutions that support multi-hypervisor and multi-cloud environments, gaining traction as a cost-effective alternative for customers [6] - The company added 620 customers in Q3 FY25, bringing its total client count to 27,490, demonstrating strong recurring revenue momentum [7][9] - Nutanix expanded its portfolio with new solutions like Cloud Native AOS and Nutanix Kubernetes Platform, as well as launching Nutanix Enterprise AI to support modern applications [8] - The Zacks Consensus Estimate for Nutanix's fiscal 2025 earnings is $1.74 per share, reflecting a 32.82% year-over-year increase, although its high valuation may limit near-term upside [15][17] Stock Performance and Valuation - Year-to-date, DELL shares have appreciated by 5.7%, while NTNX shares have increased by 22.9%, with Nutanix's outperformance attributed to its expanding partnerships and clientele [10] - DELL shares are currently trading at a forward Price/Sales ratio of 0.77X, indicating a cheaper valuation compared to NTNX's 6.97X, which is considered overvalued [13] - DELL holds a Zacks Rank of 1 (Strong Buy), while NTNX has a Zacks Rank of 2 (Buy), suggesting a stronger investment case for Dell [19]

Market Overview - The U.S. stock market experienced a rally in 2023 and 2024, continuing into the first half of 2025, primarily driven by the technology sector and the adoption of generative AI technology [2][4] - The AI-driven rally faced setbacks in early 2025 due to the introduction of the low-cost Chinese DeepSeek AI platform, U.S. export restrictions on high-end AI processors to China, and geopolitical tensions [3][4] AI Infrastructure Investment - The AI infrastructure sector is gaining momentum, with fears related to DeepSeek being overblown [4] - Four major companies are projected to invest $325 billion in AI infrastructure in 2025, marking a 46% year-over-year increase in capital expenditure [7][9] - The total addressable global sovereign AI market is estimated to reach $1.5 trillion [8] Recommended AI Stocks - Five AI stocks are recommended for investment in the second half of the year, all showing strong performance and a Zacks Rank 1 (Strong Buy): Jabil Inc. (JBL), Twilio Inc. (TWLO), UiPath Inc. (PATH), Intuit Inc. (INTU), and Dell Technologies Inc. (DELL) [5][9] Company Insights Jabil Inc. (JBL) - Jabil is benefiting from growth in capital equipment and AI-powered data center infrastructure, with a focus on product diversification [10] - The company has an expected revenue growth rate of 5.9% and earnings growth rate of 18.5% for the next year [12] Twilio Inc. (TWLO) - Twilio is enhancing its cloud communications platform with generative AI, launching Customer AI technology to improve customer engagement [13][15] - The expected revenue growth rate for Twilio is 7.9% and earnings growth rate is 22.3% for the current year [18] UiPath Inc. (PATH) - UiPath offers a comprehensive automation platform with embedded AI capabilities, introducing new generative AI features to enhance automation [19][20] - The expected revenue growth rate for UiPath is 8.5% and earnings growth rate is 5.7% for the current year [21] Intuit Inc. (INTU) - Intuit is experiencing steady revenue growth from its Online Ecosystem and is integrating generative AI into its products to enhance customer insights [22][23] - The expected revenue growth rate for Intuit is 11.7% and earnings growth rate is 13.7% for the next year [25] Dell Technologies Inc. (DELL) - Dell is seeing strong demand for AI servers, securing $12.1 billion in AI server orders, and expanding its cloud services [26][28] - The expected revenue growth rate for Dell is 8.7% and earnings growth rate is 16% for the current year [29]

Key Takeaways DELL's ISG revenues rose 12% in Q1 FY26, led by strong AI and traditional server demand. Servers and networking revenues climbed 16% to $6.32 billion, fueling ISG's overall growth. APEX platform and AI-optimized servers are central to DELL's multi-cloud and AI strategy.Dell Technologies (DELL) is expanding its cloud services through its infrastructure solutions and rich partner base that provides essential hardware and services that support cloud environments. Through its APEX platform, the ...

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]

Core Insights - Dell Technologies is experiencing strong demand for AI servers, particularly the PowerEdge XE9680L, driven by digital transformation and interest in generative AI applications [2][4] - The company's financial performance reflects this surge in demand, with Infrastructure Solutions Group (ISG) revenues increasing by 12% year over year to $10.31 billion in the first quarter of fiscal 2026 [3][12] - Dell's AI-optimized server orders reached $12.1 billion in the fiscal first quarter, with $1.8 billion shipped and a backlog of $14.4 billion [6][12] Financial Performance - ISG revenues rose 12% year over year to $10.31 billion, supported by strong demand for both AI and traditional servers [3][12] - The revenue from servers and networking was $6.32 billion, marking a 16% year-over-year growth [3] - The consensus estimate for second-quarter fiscal 2026 earnings is $2.26 per share, reflecting an 11.5% increase in the past 30 days and a year-over-year increase of 19.58% [16] Competitive Landscape - Dell faces significant competition from Hewlett Packard (HPE) and Super Micro Computer (SMCI) in the server market [7] - HPE's server business grew 6% year over year to $4.06 billion in the second quarter of fiscal 2025, driven by demand for AI-optimized servers [8] - Super Micro Computer has introduced new GPU solutions optimized for AI and HPC workloads, enhancing competition in the market [9] Product Development - Dell's PowerEdge servers support NVIDIA's Blackwell Ultra platform, including upcoming models designed for AI model training and complex simulations [5] - The new PowerEdge XE8712 server features the GB200 NVL4 platform and supports up to 144 NVIDIA B200 GPUs per rack [5] Valuation Metrics - Dell's shares have underperformed, losing 4.9% year to date compared to the broader Zacks Computer & Technology sector's return of 1.2% [10] - The forward 12-month Price/Sales ratio for Dell is 0.72X, significantly lower than the sector average of 6.33X, indicating a potentially undervalued stock [14]

Core Viewpoint - Dell Technologies and Microsoft are significant players in the cloud computing market, with both companies poised to benefit from the expected growth in this sector, which is projected to reach a market size of $752.44 billion in 2024 and grow at a CAGR of 20.4% from 2025 to 2030 [2][17]. Dell Technologies - Dell is expanding its cloud services through the APEX platform, focusing on multi-cloud solutions and AI infrastructure [3]. - In Q4 of fiscal 2025, Dell's Infrastructure Solutions Group revenues, which include cloud offerings, increased by 22% year over year to $11.35 billion, driven by a 37% year-over-year growth in servers and networking revenues, totaling $6.63 billion [3][4]. - The demand for AI servers is strong, fueled by digital transformation and interest in generative AI applications, with Dell's PowerEdge XE9680L AI-optimized server experiencing high demand [4]. - Dell partnered with Singapore's Institute of Technical Education in March 2025 to launch a hybrid cloud VDI Centre, aimed at enhancing digital learning and addressing the AI skills gap [5]. Microsoft - Microsoft is experiencing robust demand for its cloud and AI offerings, with Microsoft Cloud revenues reaching $42.4 billion, a 21% year-over-year increase, and Azure revenues growing by 33% [6][8]. - Major customers, including Abercrombie & Fitch and Coca-Cola, are expanding their use of Azure, which has become the preferred cloud for mission-critical workloads [7]. - Microsoft has enhanced its cloud offerings by scaling data centers and optimizing hardware, contributing to increased customer adoption of key AI capabilities [8]. - The Zacks Consensus Estimate for Microsoft's fiscal 2025 earnings is $13.30 per share, reflecting a 12.71% year-over-year increase [15]. Stock Performance and Valuation - Year to date, Dell Technologies shares have declined by 11.4%, while Microsoft shares have gained 6.5% [9]. - Dell's shares are trading at a forward Price/Sales ratio of 0.7X, significantly lower than Microsoft's 10.82X, indicating that both companies are currently overvalued [13]. - Dell's fiscal 2026 earnings estimate is $8.90 per share, showing a 9.34% year-over-year increase, while Microsoft's earnings estimate reflects a stronger growth trajectory [15][16]. Conclusion - Both Dell Technologies and Microsoft are well-positioned to capitalize on the growth of the cloud computing market, but Microsoft is identified as the stronger investment opportunity due to its superior AI-driven growth, consistent earnings momentum, and expanding enterprise adoption [17][18].

Dell Technologies (DELL) shares are cheap, as suggested by a Value Score of B. The DELL stock is trading at a significant discount with a forward 12-month P/E of 11.51X compared with the Computer and Technology sector's 23.15X. P/E Ratio (Forward 12 Months) Image Source: Zacks Investment Research YTD DELL Stock Price Performance Image Source: Zacks Investment Research The recent drop in the share price is largely due to broader market weakness. Investor sentiment has soured amid rising trade tension, with a ...

Dell Technologies (DELL) and Hewlett Packard (HPE) are well-known providers of server and enterprise solutions market, focusing on artificial intelligence (AI)-driven infrastructure and cloud computing. DELL is growing its presence in the server market through its PowerEdge servers, while HPE is expanding its footprint in the server market through its ProLiant Servers and GreenLake platform.Per IDC’s latest data, the AI infrastructure market is poised to surpass $200 billion in spending by 2028. Investments ...