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Is Dell Technologies Inc. (NYSE:DELL) the Best AI Stock to Buy on the Dip?

We recently published a list of the 8 Best AI PC Stocks to Buy Now. Since Dell Technologies Inc. (NYSE:DELL) ranks 5th in the list, it deserves a deeper look.

When the AI revolution began with the launch of ChatGPT, no one would have thought that down the road it would bring a huge growth catalyst for the PC industry, notorious for its cyclical nature and unpredictability. Fast forward to today, everyone is talking about PCs equipped with AI-focused equipment capable to process generative AI workloads. But in just a matter of few months why did the market feel the need for AI PCs? It all boils down to costs. GPT-4 costs $0.03 per 1,000 tokens for prompts and $0.06 for completion according to Microsoft’s estimates. Consider millions of users prompting LLMs from their phones and computers. The costs of scaling such systems are not feasible. That’s why the market thought allowing users to process AI-intensive workloads natively instead of using the Cloud is the future. And that caused the AI PC boom. Tech market analyst firm Canalys says AI PC shipments are expected to soar to 170 million in 2027, from 25 million in 2022. That would be a 60% share of the total PC market. The firm also expects AI PC shipments to double from 2023 to 2024 and double gain from 2024 to 2025.

Canalys also expects vendors to ship 205 million AI-capable PCs in 2028, representing a CAGR of 44% from 2024 through 2028.

For this article we scanned Insider Monkey’s database of 919 hedge funds and picked 8 AI PC stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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Dell Technologies Inc. (NYSE:DELL)

Number of Hedge Fund Investors: 82

Dell Technologies Inc. (NYSE:DELL) shares tumbled last month amid lackluster Q1 results but Wall Street believes AI server and PC growth is just getting started and Dell Technologies Inc. (NYSE:DELL) is positioned well to benefit from this cycle. Bank of America analyst Wamsi Mohan said in a note after Q1 earnings that he reiterated his Buy rating for Dell Technologies Inc. (NYSE:DELL). The analyst believes we are still in the early stages of AI adoption and expects momentum around AI servers. Mohan set a $180 price target for Dell Technologies Inc. (NYSE:DELL), which shows a 33% upside potential from the current levels.

Last month, Dell Technologies Inc. (NYSE:DELL) announced expansion of its AI PC portfolio, with new Copilot+ PCs powered by Snapdragon® X Elite and Snapdragon® X Plus processors. Microsoft has also named Dell Technologies Inc. (NYSE:DELL) as its manufacturing partner for Copilot PCs.

Dell Technologies Inc.’s (NYSE:DELL) bulls believe the market’s reaction to Dell Technologies Inc.’s (NYSE:DELL) Q1 report was irrational. Dell Technologies Inc.’s (NYSE:DELL) revenue jumped about 6.2% on a YoY in the quarter to $22.2 billion. Wall Street expects Dell Technologies Inc.’s (NYSE:DELL) EPS this year to come in at $7.71, and at $9.1 next fiscal year (2026). Based on this 2026 estimate, Dell Technologies Inc. (NYSE:DELL) is trading at around 15x its future earnings, which is lower than the industry median P/E of 23.08. According to Yahoo Finance, Wall Street has a $155.14 price target on Dell Technologies Inc. (NYSE:DELL) on average, which presents an upside potential of 14%. Based on high growth expectations from both AI PCs and servers, Dell Technologies Inc. (NYSE:DELL) is an undervalued stock to buy right now, according to analysts.

Overall, Dell Technologies Inc. (NYSE:DELL) ranks 5th on Insider Monkey’s list titled 8 Best AI PC Stocks to Buy Now. While we acknowledge the potential of Dell Technologies Inc. (NYSE:DELL), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Dell Technologies Inc. (NYSE:DELL) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

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In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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