4. Dell Technologies (NYSE:DELL)
Number of Hedge Fund Holders: 88
Forward P/E Ratio as of October 7: 15.31
TTM Net Income: $3.97 Billion
5-Year Net Income CAGR: 9.41%
Dell Technologies (NYSE:DELL) is a major player in the global technology sector, providing computing hardware, software, and IT services.
Dell Technologies (NYSE:DELL) is focusing on AI deployment for communications service providers (CSPs) by bringing together its AI expertise, infrastructure, and services. The need for AI adoption in the telecommunications industry is evident, with a recent MeriTalk study finding that 48% of telecom executives see AI as the industry’s most transformative technology in the next five years. The Dell AI for Telecom program addresses these challenges by providing CSPs with on-premises AI solutions that can enhance network performance, improve customer service, and provide greater value.
Dell Technologies (NYSE:DELL) is collaborating with NVIDIA to transform telecom networks with AI solutions. The two companies are co-creating and validating telecom AI solutions for CSPs. These solutions use Dell PowerEdge servers, NVIDIA GPUs, and enterprise-grade AI software to help CSPs use AI to enhance customer care, improve network maintenance, and automate call center scripts and customer care operations.
Dell Technologies (NYSE:DELL) and NVIDIA are also working together to facilitate AI deployments with the PowerEdge XR8000 server, which is now available with NVIDIA L4 Tensor Core GPUs. This server is designed for telecom and edge use cases and features a compact, modular design that simplifies deployment and maintenance.
Furthermore, Dell Technologies (NYSE:DELL) is helping CSPs design and deploy GPU-as-a-Service (GPUaaS) offerings, which allows them to provide on-demand NVIDIA GPU capacity for enterprise customers. This enables enterprises to scale AI deployments and resources as needed while maintaining data ownership and governance.
Dell Technologies (NYSE:DELL) is already partnering with CSPs in the Dell Telecom Open Ecosystem Labs to develop AI solutions with Dell AI Factory infrastructure and ecosystem partners to enhance customer experiences and improve network performance. For example, Lintasarta, an Indonesian information and communication technology company, is using GPU Merdeka, a GPUaaS, to provide AI infrastructure, including NVIDIA GPUs with Dell PowerEdge XE9680 servers.
Dell Technologies’ (NYSE:DELL) AI growth is supported by its core server business, which has demonstrated a growing backlog that reached $3.8 billion in Q2. Management emphasized that it recorded $3.2 billion in AI server orders “driven by tier-2 CSPs.” The company’s ability to transition its current enterprise customers to its AI-optimized portfolio is still in the early stages, and management is confident that the growing adoption will result in favorable outcomes for the company.
Dell Technologies’ (NYSE:DELL) diversified ISG portfolio which includes products in its storage, server, and networking segments, has continued to gain market share and has also made progress with tier-2 cloud service providers.
Dell Technologies’ (NYSE:DELL) margins are expected to remain solid, and the market seems increasingly confident in the company’s capabilities to overcome its past growth rates. The stock’s forward P/E ratio of 15.31 indicates a 36.35% discount compared to the sector median of 24.06. Analysts expect Dell Technologies (NYSE:DELL) to increase its earnings by 9.73% this year, and have a a consensus Buy rating at a target price of $146.58, which implies a 20.08% increase from its current levels. For the twelve months ending July 31, Dell Technologies’ (NYSE:DELL) net income was $3.97 billion, a 108.61% increase year-over-year.
