DELL at 14.87X P/E is Trading Dirt Cheap: Right Time to Buy the Stock?

Dell Technologies DELL stock is trading at a significant discount, as suggested by the Value Score of  A. In terms of the forward 12-month Price/Earnings, DELL is trading at 14.87X, lower than the Zacks Computer & Technology sector’s 29.15X. DELL is also trading cheap compared to its closest peer, including Super Micro Computer SMCI, which currently trades at a forward 12-month Price/Earnings of 16.53X.

DELL Valuation

The company’s shares have gained 29.5% in the year-to-date period, outperforming the broader Zacks Computer and Technology sector’s growth of 27.2%. The Zacks Computer - Micro Computers industry has increased 8.4% in the same time frame.

The outperformance can be attributed to Dell Technologies’ strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications. 

The robust demand is also helping DELL to fend off its competitors, like Super Micro Computer, which is also expanding its footprint in the server space. Super Micro Computer is often the first to market with the latest AI servers, including systems built on NVIDIA’s B200 and GB200 platforms, giving it a strong edge.

DELL Stock's Performance

DELL Benefits From Surging Demand for AI Servers

Dell Technologies’ leadership in AI-optimized servers is a key driver of growth. The company shipped $8.2 billion in AI servers in the second quarter of fiscal 2026. The AI-optimized server momentum saw a $5.6 billion increase in orders.  The company’s AI backlog of $11.7 billion exiting the second quarter of fiscal 2026 and a growing opportunity pipeline further underscore the sustained demand for its solutions. 

The company has achieved significant growth in AI-optimized server shipments, delivering $10 billion worth of these servers in the first half of fiscal 2026 alone. The company projects $20 billion in AI server shipments for fiscal 2026, highlighting its strong momentum in the AI infrastructure space.

Expanding portfolio has been noteworthy. In September 2025, Dell Technologies introduced the Dell PowerEdge XR8720t, the industry’s first single-server solution for Open RAN and Cloud RAN, offering up to 72 cores, enhanced connectivity and AI-driven capabilities to boost performance and lower costs for telecom and edge deployments.

Further expanding its portfolio, in October 2025, Dell Technologies announced significant improvements to its AI Data Platform. This upgrade boosts its capability to transform distributed, isolated data into actionable AI insights.  

The platform works with the NVIDIA NVDA AI Data Platform and includes high-performance storage and data engines, built-in cyber protection and data management services. These features aim to speed up AI tasks such as training, fine-tuning, Retrieval-Augmented Generation, and inferencing with better scalability and efficiency.

DELL Benefits From Expanding Clientele

DELL is benefiting from an expanding partner base that includes NVIDIA, Microsoft MSFT, Meta Platforms, Advanced Micro Devices and Imbue. 

DELL recently announced a partnership with IREN to supply racks of NVIDIA GB300 GPUs and data center equipment. This will also support IREN’s new collaboration with Microsoft. Under this agreement, IREN will give Microsoft access to NVIDIA GPUs for five years across four data centers in Texas. This move will strengthen Microsoft’s AI infrastructure and meet the growing demand for improved AI computing.

Dell Technologies Offers Positive Q3 FY26 Guidance

Dell Technologies’ innovative portfolio, expanding partner base, and growing AI footprint are significant growth drivers.  

For the third quarter of fiscal 2026, revenues are expected to be between $26.5 billion and $27.5 billion, with the mid-point of $27 billion suggesting 11% year-over-year growth.

The Zacks Consensus Estimate for Dell Technologies’ third-quarter fiscal 2026 revenues is pegged at $27.15 billion, suggesting growth of 11.43% year over year.

Non-GAAP earnings are expected to be $2.45 per share (+/- 10 cents), at the midpoint, indicating 11% growth year over year. The Zacks Consensus Estimate for earnings is pegged at $2.47 per share, which has decreased by a penny over the past 30 days. This indicates year-over-year growth of 14.88%.

Dell Technologies Inc. Price and Consensus

Dell Technologies Inc. price-consensus-chart | Dell Technologies Inc. Quote

What Should Investors Do With DELL Stock?

Dell Technologies benefits from rising demand for AI-optimized servers and an expanding partner network. The company’s innovation in AI infrastructure and positive earnings outlook support long-term strength.

DELL stock currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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