Core Insights - Dell Technologies (DELL) is experiencing significant growth driven by its strong partner network and focus on AI solutions, particularly in its Infrastructure Solutions Group (ISG) [1][2][3] Group 1: Financial Performance - ISG revenue reached a record $14.1 billion in Q3 FY26, marking a 24% year-over-year increase and seven consecutive quarters of double-digit growth [1][11] - The company logged $12.3 billion in AI server orders during Q3 FY26, with a record backlog of $18.4 billion [2][11] - For Q4 FY26, revenues are expected to be between $31 billion and $32 billion, suggesting a 32% year-over-year growth at the mid-point of $31.5 billion [5][11] Group 2: Strategic Partnerships - An expanding partner base, including companies like NVIDIA, Microsoft, and IREN, is a major growth driver for Dell Technologies [4][11] - A collaboration with IREN to deploy NVIDIA-powered AI infrastructure across North America is expected to advance AI innovation [4] Group 3: Competitive Landscape - Dell faces stiff competition in the AI infrastructure space from companies like Super Micro Computer (SMCI) and Cisco Systems (CSCO) [6] - Cisco Systems reported AI infrastructure orders from hyperscalers hitting $1.3 billion in Q1 FY26, with expectations of $3 billion in revenues for fiscal 2026 [8] Group 4: Valuation and Market Position - DELL shares have gained 13.9% in the trailing six-month period, underperforming the broader Zacks Computer & Technology sector's return of 15.8% [9] - DELL's forward 12-month Price/Sales ratio is 0.59X, significantly lower than the sector's 7.18X, indicating a potentially undervalued position [13]

Core Insights - Dell Technologies (DELL) is experiencing a decline in gross margin, which contracted 140 basis points year over year to 21.1% in Q3 FY26, primarily due to competitive pricing and an unfavorable geographical mix in traditional servers [1][9] Financial Performance - The Infrastructure Solutions Group (ISG) segment significantly supported overall gross margin performance, with revenues increasing 24% year over year to $14.10 billion in Q3 FY26, driven by a 37% growth in servers and networking revenues to $10.12 billion due to rising AI server demand [2][9] - DELL booked $12.3 billion in AI server orders in Q3 FY26, bringing year-to-date orders to $30 billion, and ended the quarter with a record backlog of $18.4 billion in AI server orders, indicating strong demand for AI solutions [3][9] - The company expects to ship $9.4 billion in AI servers in Q4 FY26, projecting full-year shipments to reach $25 billion, representing over 150% year-over-year growth [3] Competitive Landscape - DELL faces significant competition in the AI infrastructure market from Hewlett-Packard Enterprise (HPE) and Super Micro Computer (SMCI), with HPE benefiting from a favorable mix shift to networking and stable gross margins, achieving a non-GAAP gross margin of 36.4% in Q4 FY25, up 550 basis points year over year [5] - Super Micro Computer is transitioning to a full IT solutions provider, with its Data Center Building Block Solutions (DCBBS) expected to carry over 20% margins, enhancing revenue per deal and improving overall margins [6] Stock Performance and Valuation - DELL's shares have increased by 4.8% over the past six months, underperforming the broader Zacks Computer & Technology sector, which returned 19.2%, and the Zacks Computer - Micro Computers industry, which rose by 23.5% [7] - DELL's stock is considered undervalued, with a forward 12-month Price/Sales ratio of 0.64X compared to the sector's 7.49X, and the company holds a Value Score of A [10] - The Zacks Consensus Estimate for fiscal 2026 earnings is $9.89 per share, indicating a 21.50% year-over-year growth, with DELL currently holding a Zacks Rank 3 (Hold) [12]

Core Insights - Dell Technologies is experiencing significant growth driven by increasing demand for cloud infrastructure, particularly within its Infrastructure Solutions Group (ISG) [1] Group 1: Financial Performance - ISG revenues grew 24% year over year to $14.10 billion in Q3 FY26, marking seven consecutive quarters of double-digit growth [1][9] - The company booked $12.3 billion in AI server orders in Q3 FY26, with year-to-date orders reaching $30 billion [2] - Dell ended Q3 FY26 with a record backlog of $18.4 billion in AI server orders, indicating strong demand for its AI solutions [2][9] - The Zacks Consensus Estimate for fiscal 2026 earnings is $9.89 per share, reflecting a 21.50% year-over-year growth [12] Group 2: Product and Market Position - Dell's AI server business is a key contributor to its cloud infrastructure growth, supported by a diverse customer base including Neoclouds and Tier 2 cloud service providers [2] - The company is enhancing its cloud infrastructure offerings through its Dell-IP storage portfolio, which includes products like PowerStore, PowerMax, and PowerFlex [3] - Dell announced a new supply deal for NVIDIA GB300 GPUs and data center equipment to support an AI cloud collaboration with Microsoft [4] Group 3: Competitive Landscape - Dell Technologies faces strong competition in the cloud market from major players like Microsoft and Alphabet [4] - Microsoft reported $49.1 billion in cloud revenues for Q1 FY26, a 26% increase, while Alphabet's Google Cloud saw a 46% sequential increase in backlog [5][6] Group 4: Valuation and Stock Performance - Dell's shares have gained 4% over the past six months, underperforming the broader Zacks Computer & Technology sector, which returned 19.7% [7] - The forward 12-month Price/Sales ratio for Dell is 0.68X, significantly lower than the sector average of 6.60X, indicating that Dell shares are undervalued [10]

AI & Market Growth - AI is driving GDP growth, with approximately 45% of US GDP growth attributed to AI Capex [7] - AI is projected to contribute $15 trillion to global GDP [7] - The amount of data produced is expected to increase significantly, from 173 ZB in 2024 to 527 ZB by 2029 [7] - Projected AI capex investment is expected to be over $400 billion in 2025 [17] - The projected AI hardware and services opportunity is $310 billion in 2027 [17] Dell's Financial Performance & Strategy - Dell has achieved a 14% diluted EPS growth CAGR since FY21 [15] - Dell has generated approximately $4.9 billion in average annual adjusted free cash flow over the last 55 years [15] - Dell has returned $145 billion in capital since FY23 [15] - Dell's long-term financial framework targets 7-9% revenue growth and 15%+ diluted EPS growth [66, 68] - Dell is targeting to grow the dividend at 10% or better annually through FY30 [80, 82]