Jim Cramer Says Dell Technologies (DELL) Has ‘A Lot Of Upside’ If You Have Patience

We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. In this article, we are going to take a look at where Dell Technologies Inc. (NYSE:DELL) stands against other top stocks from Jim Cramer’s Latest Lightning Round.

Jim Cramer in a recent program on CNBC recommended investors to avoid worrying when others are anxious or get too excited about something when others are also doing the same. Cramer said by the time an idea is common among investors, its price already reflects its potential.

“Stocks don’t quite travel at the speed of thought but they come pretty close. So the moment a preponderance of hedge fund and mutual fund managers decide that the economy is slowing, speeding up, or flatlining, stocks start trading like that’s already the case. Usually, it takes some time to build that kind of consensus, which is why you rarely see these moves happening instantaneously. But once the big institutional portfolio managers are on the same page about something, you can be pretty darn confident that it’s baked into the averages. This is some basic economics 101 stuff.”

If every piece of news is priced in, does that mean it’s meaningless to invest in stocks and you are better off putting your money in broader market funds? Cramer calls this idea “bogus” and says the market is pretty irrational at times and stocks are incorrectly priced, giving investors an opportunity.

“The simple truth is that markets are not perfectly efficient. In fact, frankly, they’re often irrational. They ignore things, make mistakes, misvalue information every day. And that’s a major reason why anyone can make money picking individual stocks. These anomalies are everywhere, and they can be great for your portfolio,” Cramer added.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In

For this article, we watched the latest programs of Jim Cramer and picked 10 stocks he is talking about these days. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Jim Cramer Says Dell Technologies (DELL) Has ‘A Lot Of Upside’ If You Have Patience

Stock market data on a laptop screen. Photo by Alesia Kozik

Dell Technologies Inc. (NYSE:DELL)

Number of Hedge Fund Investors: 60

Jim Cramer was recently asked about his thoughts on Dell Technologies Inc. (NYSE:DELL). Here is what he said:

“Dell Technologies Inc. (NYSE:DELL) did not have a good quarter. It really was a disappointing quarter. I agree with people, even though I think the world of Michael Dell Technologies Inc. (NYSE:DELL). However, I think Dell’s second half will be much better. I do not think much of its first half. If you have the patience to own the stock here, I don’t think there’s a lot of downside, and I think there’s a lot of upside. However, we own other stocks in the portfolio that I think are better, even at this price. Do you know that I actually like Nvidia at 134 more than I like Dell? Just saying.”

In the most recently reported quarter, Dell’s Infrastructure Solutions Group (ISG) posted an impressive 34% year-over-year growth, reaching $11.4 billion in revenue. The server business rose a whopping 58% increase YoY to $7.4 billion.

Dell Tech Inc (NYSE:DELL) experienced a shift in AI server demand toward the next-generation Blackwell architecture. Dell Tech Inc (NYSE:DELL)’s management highlighted that there was a dramatic shift in orders toward Nvidia’s (NVDA) Blackwell-based systems during Q3, which impacted short-term shipments as these products ramp up production. This shift shows Dell Tech Inc (NYSE:DELL)’s competitive position, as customers are willing to wait for the latest tech solutions. Dell secured $3.6 billion in AI server orders this quarter, an 11% increase from the previous quarter. Dell Tech Inc (NYSE:DELL) also signed over 2,000 enterprise customers for their AI solutions.

Carillon Scout Mid Cap Fund stated the following regarding Dell Technologies Inc. (NYSE:DELL) in its Q2 2024 investor letter:

“Dell Technologies Inc. (NYSE:DELL) was a top contributor despite reporting disappointing first-quarter earnings results, because investors looked through the near-term disappointment and expected strong growth from AI-related servers and personal computers. We expect Dell to participate in the growth of artificial intelligence hardware, especially as enterprises invest more aggressively. We like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”

Overall, DELL ranks 7th on our list of top stocks from Jim Cramer’s Latest Lightning Round. While we acknowledge the potential of DELL, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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 is originally published at Insider Monkey.