Is Dell Technologies a great radar AI stock?
When you listen Dell Technologies (NYSE: Dell)Think about the laptop you probably use at work. It’s a fair rating, as it’s likely you are the most common interaction with the company’s products, but Dell is also a large player in the artificial intelligence (AI) space.
Its server division is growing rapidly and benefits from helping to build all the computing power companies needed to develop and deploy AI models. This makes for a potential Radal AI stock, but is it worth investing?
As mentioned before, Dell can split the company into two parts. The PC department is called the Client Solutions Group (CSG). Servers Division Infrastructure Solutions Group (ISG). Both departments provide computing power to their customers, but the growth between these two cannot be any more different.
CSG has not grown in substantially, with revenues down 1% year-on-year to $12.1 billion during fiscal year 2025 (ends November 1). However, commercial clients within this segment were revenues up 3% to $10.1 billion. This shows that Dell has problems with consumers, not business class customers. Anyway, this department may not have the potential to grow at an ultra-fast pace, as most people and businesses have laptops and PCs for everyone. The only thing that moves the needle in this segment is the computer update cycle, but that boost will not last forever and will eventually return to mediocre growth.
Conversely, Dell’s ISG group is experiencing rapid growth, with revenues rising 34% year-on-year to $11.4 billion in the third quarter. Within this division, networking revenue rose 58% year-on-year to $7.4 billion. In the AI computing space, there is a huge demand for servers, and Dell has benefited greatly from it.
AI usage has increased dramatically over the past few years, but we are far from reaching the limits of how integrated it can be in our daily lives. As a result, this growth catalyst must continue for Dell for some time.
Overall, Dell revenues rose 10% Earnings per share (EPS) This was an increase of 16% from the previous year. There have been many ups and downs to reach that mid-number, but the result is inventory that appears to have the potential to win the market if growth continues.
But is the stock price correct?
Dell is a fully mature company, so using the price-to-revenue (P/E) ratio is a great way to value your company. With 18x subsequent revenues and 11x advance revenues, Dell is a very cheap stock compared to other markets.
