Dell Technologies Inc. (DELL)

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AI: Overvalued

Price checkAt $503, Dell’s price leaves little room for its server boom to slow.

Investing.com showed $503.00 in premarket trading at 4:58 a.m. Eastern on August 17, versus Friday’s $490.81 close. With 649 million shares reported in May, the price implies about $326 billion of stock value. Free cash flow—cash left after operations and capital spending—was $8.6 billion in fiscal 2026, only a 2.6% yield on that value. The price is also 29 times Dell’s $17.31 fiscal 2027 earnings-per-share forecast. That combination supports an Overvalued verdict unless exceptional growth lasts beyond this year.

Big pictureExplosive server growth has lifted profits, but Dell’s cash generation remains uneven.

Revenue rose 19% to $113.5 billion in fiscal 2026, while operating income rose 31% to $8.1 billion. First-quarter fiscal 2027 revenue then jumped 88% to $43.8 billion, and net income more than tripled to $3.44 billion. Yet gross profit fell from 21.1% to 17.8% of sales as lower-margin server products became dominant. Annual operating cash flow ranged from $3.6 billion to $11.4 billion over six years, showing why the latest peak should not automatically be treated as permanent.

Business strengthStrong cash returns shrink the share count, but debt limits the balance-sheet cushion.

Dell held $11.6 billion of cash against $31.2 billion of debt in May, leaving $19.6 billion of net debt. Current liabilities exceeded current assets by $4.0 billion, while reported shareholder equity was negative $1.4 billion. The deficit largely reflects $16.1 billion of repurchased shares rather than immediate distress. Dell spent $1.63 billion on buybacks and $464 million on dividends in the quarter; shares fell from 696 million in January 2025 to 649 million. However, repurchases near $503 retire far fewer shares than earlier purchases around $120 to $193.

What could change the storyBacklog conversion could justify more upside, while slower server demand would expose the valuation.

The bull case requires Dell’s $51.3 billion artificial-intelligence server backlog to become profitable revenue, fiscal 2027 sales to reach the guided $167 billion midpoint, and storage and personal computers to keep growing. The bear case is that $503 already equals 29 times guided earnings despite thin product margins and hardware cycles. At a more cautious 20 times earnings, Dell needs about $25.15 of sustainable earnings per share—45% above its fiscal 2027 forecast. Durable double-digit infrastructure margins would help; falling backlog, margins, or cash would weaken the case.

$503.00 price considered

AI: News

Record quarter resets outlookDell’s server surge crushed expectations, prompting much higher annual sales and profit forecasts.

On May 28, Dell reported quarterly revenue of $43.84 billion, up 88% and well above analysts’ $35.43 billion average. Adjusted earnings were $4.86 per share versus $2.94 expected. Artificial-intelligence server revenue reached $16.1 billion, orders reached $24.4 billion, and backlog reached $51.3 billion. Dell raised annual revenue guidance to $165 billion–$169 billion from $138 billion–$142 billion and adjusted earnings guidance to $17.90 from $12.90. Reuters reported the shares rose about 39% in extended trading.

Large defense agreement awardedA five-year software agreement adds government volume, although Dell’s actual profit remains undisclosed.

On May 28, the U.S. defense department confirmed that Dell Federal Systems received a five-year purchasing agreement valued at approximately $9.7 billion. Dell will provide access to Microsoft 365, cloud subscriptions, and on-site software licenses. The agreement may strengthen recurring government business, but $9.7 billion is a maximum purchasing value, not guaranteed Dell revenue, and much of the spending likely passes through to Microsoft. Because the announcement closely preceded earnings, its separate stock-price effect cannot be identified reliably.

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Free cash flow

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Total cash / debt

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2018	2017	2016	2015
Revenue	$113.54B	$95.57B	$88.42B	$102.30B	$101.20B	$86.67B	$84.81B	$79.04B	$61.64B	$50.91B	$54.14B
Gross profit	$22.71B	$21.25B	$21.07B	$22.69B	$21.89B	$20.14B	$20.64B	$20.54B	$12.96B	$8.39B	$8.90B
Research & development	$3.14B	$3.06B	$2.80B	$2.78B	$2.58B	$2.46B	$2.45B	$4.38B	$2.64B	$1.05B	$920.0M
Operating expenses	$14.56B	$15.01B	$15.66B	$16.91B	$17.23B	$16.45B	$18.27B	$22.95B	$16.21B	$8.90B	$9.21B
Operating income	$8.15B	$6.24B	$5.41B	$5.77B	$4.66B	$3.69B	$2.37B	−$2.42B	−$3.25B	−$514.0M	−$316.0M
EBITDAderived	$11.18B	$9.36B	$8.71B	$8.93B	$9.21B	$9.07B	$8.51B	$6.22B	$1.69B	$2.36B	$2.66B
Net income	$5.94B	$4.59B	$3.39B	$2.44B	$5.56B	$3.25B	$4.62B	−$2.85B	−$1.67B	−$1.10B	−$1.22B
Basic EPSper diluted share	$8.79	$6.51	$4.71	$3.33	—	$4.37	$6.38	—	—	—	—
Diluted EPSper diluted share	$8.68	$6.38	$4.60	$3.24	—	$4.22	$6.03	—	—	—	—

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)2274$11.55B disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 26, 2026Form 4	Durban Egon +1Director	SellClass C Common Stock · indirect	213	$400.67	$85.3K	0
Jun 26, 2026Form 4	Durban Egon +1Director	SellClass C Common Stock · indirect	387	$400.67	$155.1K	0
Jun 26, 2026Form 4	Durban Egon +1Director	SellClass C Common Stock · indirect	532	$399.38	$212.5K	213
Jun 26, 2026Form 4	Durban Egon +1Director	SellClass C Common Stock · indirect	968	$399.38	$386.6K	387
Jun 26, 2026Form 4	Durban Egon +1Director	SellClass C Common Stock · indirect	284	$398.16	$113.1K	745

Review ownership filings at SEC.gov ↗

Dell Technologies Inc. (DELL)

Financial charts

Financial statements

Insider buys & sells