Market analysis
Invest Ideas

Dell Technologies | A Profitable Tool for Betting on AI Development

Current Price – $138.2
Target Price – $164.5
Growth Potential – 19.0% 🔥
Dividend Yield – 1.26%💵
Investment Time – 1 Year

Dell Technologies is an American company, one of the world's largest manufacturers of computers, servers, and peripheral equipment. Dell is a supplier of server equipment optimized for the use of artificial intelligence (AI) technologies, which suggests good prospects against the backdrop of the global trend for the development of this technology. At the same time, the recent correction made the company's shares very attractive for purchase. The fair value of Dell shares is $164.5, upside 19.0%. Dividend yield – 1.26%.

Investment Theses

🔼Good prospects against the backdrop of the global trend for AI.

Dell reported solid results for the first quarter of fiscal year 2025 (1Q2024). The company's revenue grew by 6% y/y and reached $22.2 billion. The server business showed strong dynamics - sales increased by 42% to $5.5 billion amid high demand for AI solutions. Adjusted earnings per share (EPS) decreased slightly - by 3% to $1.27. Dell expects that in the second quarter of fiscal year 2025, revenue will grow by 5% y/y, and in the coming years it will grow at a compound annual rate of 8%.

🔼Attractive valuation.

Dell shares have risen by 169.5% over the past 12 months, but the recent sell-off after the publication of quarterly results created an attractive buying moment. The company is currently valued at just 18 times expected annual earnings and just 1 times annual revenue, significantly cheaper than its sector peers, making it a great target for betting on the booming AI market.

How to invest

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