The Rise of Dell Technologies
Dell Technologies (DELL) has recently made a significant comeback in the market. It’s worth mentioning that just two months ago, the stock had dipped below its pre-Thanksgiving 200-day moving average, leading to its removal from the list of top-performing stocks. However, stocks stopped falling, and a period of consolidation followed from November to March. Investors were somewhat anxious about the trends in AI capital spending, but everything changed when major companies released their quarterly earnings. This spike was largely triggered by Nvidia’s announcement regarding a massive backlog in demand.
Currently, only about 3% of the S&P 500 companies are hitting new 52-week highs, including Dell. It’s important to note that market trends can be unpredictable. Sometimes promising stocks just don’t pan out, and many traders might forget about them altogether, thinking, “I’ll never touch that stock again.” Yet, some of the best opportunities arise after multiple attempts. There are instances where investors have to take a small hit before a stock rebounds. This kind of resilience—buying at $10, then selling at $9, and buying back at $11—requires a certain level of emotional maturity, which, let’s face it, not everyone has. That’s why many folks might prefer to work with an investment manager instead.
Now, let’s talk about how Dell earned its spot back on our radar. Dell’s journey began in the 1980s and ’90s with its innovative direct-to-consumer model, making computers accessible to a wider audience. However, by the 2010s, its hardware struggled to find a place in the market. This led to a restructuring aimed at refocusing the business in 2013. Fast forward, and Dell is now positioned as a critical player in the AI space, providing customizable AI and data center solutions that accommodate various platforms and configurations.
The company’s services include working directly with clients on optimizing their data center needs before the hardware even arrives. It’s a comprehensive service suite that covers implementation, ongoing support, storage solutions, and even financing options. The growth potential has been remarkable, skyrocketing from zero revenue in previous years to $24.7 billion in fiscal year 2026. Additionally, Dell secured $64.1 billion in AI-related orders and has a record $43 billion backlog, with further growth expected in its forward pipeline.
Looking ahead, management projects FY27 AI Server revenue will be around $50 billion, representing a 103% increase. This growth is expected to significantly drive Dell’s overall revenue guidance for FY27, which stands at $138-142 billion. Analysts anticipate an EPS growth of 23% this year and 15% the following year. For a company with its history, that’s pretty impressive.
Shifting gears to the technical analysis, it seems Dell has broken through new highs after facing a year of considerable volatility. The stock is now trading above previous resistance levels, which is a good sign. However, chasing this upward momentum comes with risks, as the stock’s rapid ascent has pushed the RSI into the low 70s. It might be wise to wait for a brief cooldown period.
For traders, key levels are around $150. If the stock remains above that, the outlook stays positive. However, if it dips below $160, it could dampen short-term momentum. For longer-term investors, the crucial point is whether the stock stays above its 200-day moving average around $130, which would maintain the larger upward trend.
Overall, even a minor dip may be tolerable given the broader context. And as indicated in the chart, there’s a golden crossover happening with the 50-day moving average breaking above the 200-day, which is typically a solid bullish indicator.
Just a quick note: the insights shared here reflect individual opinions and not specific financial advice. It’s wise to consult a financial advisor when making investment decisions.
