Key Takeaways
- Dell jumped 5% today as AI stocks, Super Micro Computer among them, bounced back from Thursday’s post-midterm selloff.
- Analysts kept their Dell estimates steady as the stock lost about 45% in a month.
- Dell’s forward P/E has fallen well below its August peak.
- Dell’s Nov. 24 report has to show its $95 billion AI backlog turning into cash.
Dell Technologies (DELL) jumped 5% today, as AI stocks won back some of Thursday’s post-midterm losses. Fellow AI server maker Super Micro Computer (SMCI) is up 6%.
Thursday was about Washington
Democrats won control of Congress, raising fears of new limits on data center construction. Texas elected Gina Hinojosa governor after she campaigned for a moratorium on new computing facilities.
Dell had no news of its own, and it fell another 11% that day.
Wall Street never cut its numbers
Dell lost about 45% in a month, and TIKR’s consensus still has it earning $25.90 a share in the year ending January 2027 and $30.26 the year after:
Dell traded at 14x forward earnings at Thursday’s close, down from 26x in mid-August and closer to its five-year average of 12x:
AMD and Super Micro say demand held up
On Tuesday, Advanced Micro Devices (AMD) reported data center revenue of $8.5 billion, up 97% from a year earlier. It guided to about $17 billion of fourth-quarter revenue, up about 66%. That’s the same AI build-out Dell sells into, and AMD expects its growth to speed up this quarter.
Super Micro shows the harder part. Its September-quarter sales nearly quadrupled from a year earlier to $19.9 billion. But its operations used $434 million of cash, and its inventory passed $15 billion.
TIKR tracks 29 analysts on Dell Technologies. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Dell Technologies, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Dell Technologies’ Analyst Ratings
Nov. 24 has to show the cash
Dell reports on Nov. 24, with a $95 billion AI backlog at the end of July. But free cash flow fell 47% from a year earlier to $986 million in the quarter to July 31.
Inventory and loans to customers took up $17.3 billion of cash in the first half, so free cash flow stayed flat at $4.1 billion while net income more than tripled.
Investors sold Dell on a political scare while its earnings outlook never changed. If cash catches up on Nov. 24, the bounce should hold.
Of course, a Texas moratorium would hit data centers that aren’t built yet, the orders behind next year’s estimates.
So what is Dell stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
