Dell Computers (DELL)

It's had a huge run and the stock got ahead of him. Not only will the iPhone have a new refresh cycle, but also Dell. He will buy it.

Generative AI came along, and the hyperscalers need the servers and blades. Stock sold off because the whisper numbers were so high, earnings couldn't meet expectations.

See his Top Picks for something still left in the food chain.

It's a major enabler of AI chips and now trades at attractive levels.

Entering the S&P index will be positive for them. It's always been well-managed. There's excitement in Dell now because the impact they're making in data centres, and there is a major PC/laptop upgrade cycle coming.

It had a big run up then fell 20% after reporting last week. Dell will benefit from AI. They make good products and services. You can make money in this long term, maybe not short.

Good stock that's come down. Sitting right along its 50-day MA, which traditionally is a great entry point if you think a stock's going to go up. Will continue to see demand in the AI server category. Hopefully, will see better margins come out of that as demand increases. Less risk, as you balance AI exposure with diversity from its more traditional businesses. Yield is 1.4%.

They reported last Thursday. Shares plunged 18% and another 5% today. It was priced for perfection and shares were in a hot rally in previous quarters leading up that report. Expectations were too high and maybe their AI business may not be as profitable as expected. That said, sales momentum is strong and their AI server backlog is up 30% over the past quarter, but isn't driving earnings much yet. The pullback is healthy given the overheated rally before. The AI story is on track but could take a little longer to play out. He still likes it.

It reports Thursday. Their partnership with Nvidia is great. Shares keep rising.

Flying under the radar, snuck up and popped. 12-month price target of $135.

They delivered a blow-out quarter. There's more room to run. Dell is crucial in installing Nvidia's systems.

DELL's forward PE is currently 16.3x and it was at about ~12x before the big jump it just had prior to its earnings release. DELL's recent earnings highlighted increasing demand for its AI servers and reported servers and networking revenue of $4.9B. DELL did see declines in other revenue segments such as the Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG) which highlight the general mature nature of the company. DELL is benfitting from AI tailwinds and while it is definitely a stable option at a good valuation, we would not necessarily characterize it as a growth name. With strong recent performance and also paying a small yield of 1.38%, we like DELL as a value name, however would not expect the same growth that it has had in the last year to be a long-term trend. 
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Their earnings beat surprised the market. It's also under-owned. Both account for the sharp upswing in shares today.

Hitting new highs after reporting a strong beat, based on demand for AI servers. They had a good, not great quarter: good AI server revenues and their backlog jumped from $1.6 billion to $2.9 billion, but it's a $90-billion revenue company. Revenue was in line and they lowered guidance for the next quarter. This doesn't justify their market cap jumping by a third.

A conservative play, given that we don't know if we're going to have a recession in Q3 or Q4. Haircut and slowing growth, but 60-65% of its business is in data centres. So it's a play on generative AI, which needs data. One of the biggest suppliers of racks in data centres. Price target of $55. Yield is 3.14%.