We came across a bullish thesis on Dell Technologies Inc. (DELL) on Substack by Magnus Ofstad. In this article, we will summarize the bulls’ thesis on DELL. Dell Technologies Inc. (DELL)’s share was trading at $91.46 as of March 7th. DELL’s trailing and forward P/E were 14.34 and 9.82 respectively according to Yahoo Finance.
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Dell Technologies (DELL) stands out as an undervalued opportunity amid the current market turbulence. The company continues to demonstrate solid fundamentals, yet its stock has been caught in the broader sell-off driven by economic uncertainty and shifting investor sentiment under Trump’s second term. Initially, the market favored high-growth names, but the tide has turned, with defensive sectors like retail and healthcare emerging as winners. Tech stocks, including DELL, have faced heavy selling pressure, exacerbated by concerns over tariffs and economic policy uncertainty.
Despite the macroeconomic headwinds, DELL delivered a strong fiscal 2025 performance, meeting expectations with 8% revenue growth and a solid 15% operating margin. The commercial PC segment grew by 5%, but the real strength lay in its server business, where traditional servers and AI-optimized infrastructure saw double-digit growth. Demand for AI-driven storage solutions continues to accelerate, positioning DELL as a key beneficiary of the ongoing enterprise shift toward AI and cloud computing.
Following earnings, the market reacted negatively to DELL’s guidance, sending shares lower. Management projected steady 8% revenue growth for fiscal 2026, but the operating margin is expected to decline by one percentage point to 14%, slightly weaker than anticipated. This conservative outlook, coupled with broader uncertainty surrounding Trump’s economic policies, led to a sharp sell-off, pushing the stock down more than 10%. The company’s exposure to global supply chains and potential tariff impacts have added to investor concerns, though these fears may be overstated.
Even with the slight downward revision in expectations, DELL remains fundamentally strong. The company continues to generate robust cash flow, supports a growing dividend, and executes consistent share buybacks, reinforcing shareholder value. While a cautious approach is warranted given the macro backdrop, the stock’s sell-off has created a compelling entry point. Adjusting for the updated guidance, the fair value estimate comes to $140, which still implies substantial upside from current levels. DELL’s positioning in the AI-driven server and storage market, combined with its disciplined capital allocation, makes it an attractive investment despite near-term uncertainties. If market sentiment stabilizes and economic concerns ease, DELL is well-positioned for a significant rerating.
Dell Technologies Inc. (DELL) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held DELL at the end of the fourth quarter which was 60 in the previous quarter. While we acknowledge the risk and potential of DELL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DELL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.