DELL Plunges 18% in Three Months: Buy, Sell, or Hold the Stock?

Dell Technologies DELL shares have plummeted 17.8% in the past three-month period, underperforming the broader Zacks Computer & Technology sector’s return of 3.2%. The Computer - Micro Computers industry increased 5% in the same time frame. The underperformance can be attributed to supply-chain constraints and competitive pressures in the PC and AI server markets.

DELL Stock's Performance

However, Dell Technologies is benefiting from strong demand for AI servers, driven by ongoing digital transformation and heightened interest in generative AI applications.  In the third quarter of fiscal 2026, the company booked $12.3 billion in AI server orders, bringing year-to-date orders to $30 billion. The company shipped $5.6 billion worth of AI servers in the fiscal third quarter.

The company concluded its fiscal third quarter with a record backlog of $18.4 billion in AI server orders, underscoring the sustained demand for its AI solutions. The demand for AI servers is driven by a diverse and expanding customer base, including Neoclouds, Tier 2 cloud service providers, Sovereigns, and Enterprises.

DELL Benefits From Expanding Portfolio

Dell Technologies’ expanding portfolio has been a key catalyst. Its leadership in AI-optimized servers has contributed to the rise in its Infrastructure Solutions Group (ISG) revenue. In the third quarter of fiscal 2026, ISG revenues grew 24% year over year to $14.10 billion, marking seven consecutive quarters of double-digit growth.

Further expanding its portfolio, in November 2025, Dell Technologies announced it would support Firebird’s $500 million Armenia investment by supplying PowerEdge AI servers and NVIDIA Blackwell GPUs for a supercomputing cluster set to begin operating in early 2026.

Dell Technologies’ focus on AI infrastructure has positioned it as a leader in the market. The company expects to ship approximately $9.4 billion worth of AI servers in the fiscal fourth quarter of 2026. Its AI server shipments are expected to reach $25 billion for fiscal 2026, representing a remarkable 150% year-over-year growth.

DELL Offers Positive Q4 & FY26 Guidance

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

For the fourth quarter of fiscal 2026, revenues are expected to be between $31 billion and $32 billion, with the mid-point of $31.5 billion suggesting 32% year-over-year growth. The Zacks Consensus Estimate for Dell Technologies’ fiscal fourth-quarter revenues is pegged at $31.62 billion, suggesting growth of 32.12% year over year.

Non-GAAP earnings are expected to be $3.50 per share (+/- 10 cents) at the midpoint, indicating 31% growth year over year. The Zacks Consensus Estimate for earnings is pegged at $3.46 per share, unchanged over the past 30 days. This indicates year-over-year growth of 29.10%.

For fiscal 2026, revenues are expected to be between $111.2 billion and $112.2 billion, with the mid-point of $111.7 billion indicating 17% year-over-year growth. The Zacks Consensus Estimate for Dell Technologies’ fiscal 2026 revenues is pegged at $111.78 billion, suggesting growth of 16.96% year over year.

Non-GAAP earnings are expected to be $9.92 per share (+/- 10 cents) at the midpoint, up 22% year over year. The Zacks Consensus Estimate for earnings is pegged at $9.89 per share, unchanged over the past 30 days. This indicates year-over-year growth of 21.50%.

Dell Technologies Inc. Price and Consensus

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

DELL Shares Trading Cheap

Dell Technologies shares are cheap, as suggested by a Value Score of A.

Dell Technologies’ stock is trading at a significant discount with a forward 12-month P/S of 0.66X compared with the Computer and Technology sector’s 7.41X.

DELL's Valuation

DELL Faces Stiff Competition

Despite DELL’s expanding portfolio, the company is facing stiff competition in the AI infrastructure space against the likes of Hewlett-Packard HPE, Cisco Systems CSCO, and Super Micro Computer SMCI.

Hewlett-Packard Enterprise’s continuous investment in innovation is driving its success in AI infrastructure. In December 2025, Hewlett-Packard Enterprise and NVIDIA expand their partnership to launch the AI Factory Lab in Grenoble, France, addressing EU customers’ needs for more control and autonomy over their AI infrastructure and data.

Strong demand for Cisco Systems products in developing AI infrastructure has been a game-changer for the company. In the first quarter of fiscal 2026, Cisco Systems received AI Infrastructure orders from webscale customers that exceeded $1.3 billion.

Super Micro Computer is well-positioned to benefit from the growing demand for AI infrastructure. In November 2025, Super Micro Computer introduced the latest addition of AI-accelerated solutions with a new 10U air-cooled server, which incorporates the AMD Instinct MI355X GPUs delivering breakthrough performance for AI and Inference workloads.

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.

However, Dell Technologies is facing declining consumer PC revenue, which remains a headwind. Supply-chain costs and competitive pressures in the AI market are also impacting profitability. 

Dell Technologies currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point to accumulate the stock. 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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