Dell Technologies (DELL) Faces Valuation and Competition Concerns After Strong Rally

Dell Technologies Inc. (NYSE:DELL) is one of the 14 AI Stocks Making Moves on Wall Street: Nvidia, Micron, and More.

Even though near-term tailwinds exist for Dell Technologies, one analyst firm believes that its current valuation and long-term competitive risks leave little room for upside. On June 25, GF Securities analyst Jeff Pu downgraded the stock from Buy to Hold without a price target.

Dell’s share price has rallied over 200% since F4Q26 results, driven by AI backlogs and general server strength. While recent GB300/HGX orders influx provide near-term tailwinds for this year, we see limited upside amid already elevated expectations.

The firm believes that investor expectations regarding the potential increase in Dell’s AI revenue to $70 billion and related improvement in revenue and EPS are already reflected.

Meanwhile, there are longer term risks to Dell’s current position. For instance, SpaceX’s next GW deployment is expected in 2027, with SMCI expected to gain share. Moreover, both SpaceX and CoreWeave are evaluating ODM-direct model.

Dell Technologies (DELL) Faces Valuation and Competition Concerns After Strong Rally

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The firm believes that these events may impact Dell’s current leading positioning as a primary supplier to SPCX and exclusive to CRWV.

We revise our EPS estimates by +3%/-3% in FY27E/FY28E. At >20x consensus FY28E EPS (or SOTP of 25x AI and 15x core business), we think the risk-reward is uncompelling. Accordingly, we downgraded the stock to Hold.

Dell Technologies Inc. (NYSE:DELL) is a global technology company that develops and sells laptops, personal computers, networking equipment, servers, data storage systems, and related software and services.

While we acknowledge the risk and potential of DELL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DELL and that has 10,000% upside potential, check out our report about the cheapest AI stock.

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