10 Best Information Technology Services Stocks to Buy

5. Dell Technologies Inc. (NYSE:DELL)

Number of Hedge Fund Holders: 82

Dell Technologies Inc. (NYSE:DELL) has emerged as a leading vendor for AI-oriented servers, which are in high demand as companies invest in infrastructure for predictive and generative AI.

Dell Technologies Inc. (NYSE:DELL) reported first-quarter earnings on May 30 that surpassed analysts’ expectations for both earnings and sales. The company projected current-quarter earnings of $1.65 per share and sales between $23.5 billion and $24.5 billion, while analysts anticipated $23.35 billion. For the full fiscal year, Dell Technologies Inc. (NYSE:DELL) forecasted sales between $93.5 billion and $97.5 billion. The company also reported a net income of $955 million for the quarter, or $1.32 per diluted share, compared to $578 million, or $0.79, in the same period last year. Dell’s Infrastructure Solutions Group, which includes data center sales, saw a 22% annual increase in sales, reaching $9.2 billion. In addition, the company’s server unit experienced significant growth, with sales rising 42% to $5.5 billion, driven by strong demand for AI servers.

Bank of America analyst Wamsi Mohan reiterated his Buy rating for Dell Technologies Inc. (NYSE:DELL) following the Q1 earnings report. Mohan believes the AI adoption phase is still in its early stages and expects continued momentum around AI servers. He set a $180 price target for Dell, indicating a 33% upside potential from current levels.

As of the close of Q1 2024, 82 investors disclosed positions in Dell Technologies Inc. (NYSE:DELL), with total stakes amounting to $2.97 billion, an increase from $2.81 billion in the previous quarter.

Carillon Scout Mid Cap Fund stated the following regarding Dell Technologies Inc. (NYSE:DELL) in its first quarter 2024 investor letter:

“Dell Technologies Inc. (NYSE:DELL) reported results that exceeded earnings expectations and announced a better than expected AI-optimized server order pipeline. We expect Dell to participate in the growth of artificial intelligence hardware in its server, storage and personal computing franchises. Long-term, we like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”