20 Undervalued Momentum Stocks That Are Taking Off

4. Dell Technologies Inc. (NYSE:DELL)

3-Month Price Change: 27.4%

Forward PE: 12.6

Number of Hedge Fund Holders: 63

Dell Technologies Inc. (NYSE:DELL) is one of the 20 undervalued momentum stocks that are taking off. On June 26, Morgan Stanley’s Erik Woodring reiterated his Buy rating on Dell Technologies, maintaining a price target of $135.

His outlook was based on Dell’s solid position which enables it to benefit from accelerating demand for AI servers, which he believes could drive earnings meaningfully above current expectations. According to Woodring, while the ramp-up in AI infrastructure may introduce pressure on operating margins, Dell should be able to manage these challenges effectively through disciplined cost control.

While the company is transitioning towards a more capital-intensive product mix, the analyst highlights that Dell’s operational efficiency should support its margins. In addition, the management’s execution in its core storage business is expected to offset potential headwinds and support overall margin expansion.

In essence, Woodring’s investment case for Dell rests on the company’s ability to convert its AI server momentum into sustainable earnings growth while maintaining margin discipline. In his view, better operating margins could prove to be a catalyst for substantial share price upside.

Dell Technologies Inc. (NYSE:DELL) is a key player in IT infrastructure modernization. Its extensive product portfolio includes personal computers, servers, storage solutions, networking, software, and cybersecurity.