Should You Buy, Sell or Hold Dell Technologies Stock at P/S of 0.77X?

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

DELL stock is trading at a significant discount with a forward 12-month P/S of 0.77X compared with the Computer and Technology sector’s 6.36X.

Price/Sales (F12M)

However, DELL’s shares have risen 1.2% in the year-to-date period, underperforming the Zacks Computer and Technology sector’s appreciation of 1.6%. The underperformance can be attributed to a challenging macroeconomic environment, along with stiff competition in the PC market from companies like HP and Lenovo. 

The broader PC market recovery is slower than expected, with customers delaying purchases to evaluate AI-enabled PCs and prepare for the Windows 10 end-of-life. A competitive pricing environment, especially in the CSG segment, has affected profitability. Additionally, investor sentiment has also soured amid rising trade tension, with additional tariffs raising fears of escalating costs. 
  
However, Dell Technologies’ shares have outperformed the Zacks Computer - Micro Computers industry’s decline of 20.9%. The outperformance can be attributed to DELL’s expanding portfolio and rich partner base.

DELL Stock Performance

DELL Benefits From Expanding Clientele

DELL is benefiting from an expanding partner base that includes Lowe’s Companies LOW, NVIDIA NVDA, Worley WOR, Microsoft, Meta Platforms, Advanced Micro Devices and Imbue. 

Dell Technologies recently partnered with Lowe’s to enhance customer and associate experiences through advanced AI and PC technology. 

Using the Dell AI Factory with NVIDIA, Lowe’s is optimizing inventory, improving asset protection, and enriching in-store service. Dell Technologies’ advanced infrastructure and high-performance PCs support innovation, efficiency, and long-term growth across Lowe’s more than 1,700 stores and offices.

In May 2025, Dell Technologies announced major advancements across the Dell AI Factory with NVIDIA to accelerate enterprise AI adoption. These include next-generation PowerEdge servers, enhanced AI data platforms, integrated software solutions, and new managed services for streamlined AI deployment.

In March 2025, Dell Technologies and Worley announced a collaboration to develop secure AI solutions using the Dell AI Factory with NVIDIA. This partnership with Worley aims to enhance project delivery and innovation while ensuring data privacy and intellectual property protection.

Dell Technologies Expands AI Portfolio With PowerEdge Surge

Dell Technologies’ expanding portfolio has been a key catalyst.  The company is benefiting from the strong demand for AI servers, which are driven by ongoing digital transformation and heightened interest in generative AI applications. Its PowerEdge XE9680L AI-optimized server is very much in demand. Strong enterprise demand for AI-optimized servers is aiding Dell.

In the fiscal first quarter of 2026, Dell Technologies’ AI-optimized server momentum saw an increase of $12.1 billion in orders. The flagship PowerEdge XE9680 experienced strong demand, contributing to the momentum in the AI space. The company shipped $1.8 billion worth of AI servers in the fiscal first quarter, and the AI server backlog remained healthy at $14.4 billion.

Dell PowerEdge supports the NVIDIA Blackwell Ultra platform, including the upcoming NVIDIA HGX B300 NVL16, NVIDIA GB300 NVL72 and NVIDIA RTX PRO 6000 Blackwell Server Edition.  The new Dell PowerEdge XE8712 server features the GB200 NVL4 platform and supports up to 144 NVIDIA B200 GPUs per Dell IR7000 rack. These liquid-cooled systems are tailored for AI model training and complex HPC simulations.

Dell Technologies Offers Positive Q2 FY26 Guidance

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

For the second quarter of fiscal 2026, revenues are expected to be between $28.5 billion and $29.5 billion, with the mid-point of $29 billion suggesting 16% year-over-year growth.

The Zacks Consensus Estimate for Dell Technologies’ second-quarter fiscal 2026 revenues is pegged at $29.09 billion, suggesting growth of 16.23% year over year.

Non-GAAP earnings are expected to be $2.25 per share (+/- 10 cents), indicating 15% growth at the mid-point. The Zacks Consensus Estimate for earnings is pegged at $2.26 per share, which has increased by 5.1% in the past 30 days. This indicates year-over-year growth of 19.58%.

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. 

Despite PC market challenges and macroeconomic headwinds, its innovation in AI infrastructure and positive earnings outlook support long-term strength.

DELL stock currently sports a Zacks Rank #1 (Strong 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 stocks here.

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

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