DELL Should I Buy
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Dell Technologies Inc is not a strong buy at this moment for a beginner, long-term investor with $50,000-$100,000 available. While the company has shown strong financial growth and significant AI-related opportunities, the recent price drop, cautious market sentiment, and mixed analyst ratings suggest holding off on immediate investment until further clarity emerges post-earnings on February 26, 2026.
The MACD is positive and contracting, indicating a potential weakening of bullish momentum. RSI is neutral at 36.128, showing no clear overbought or oversold conditions. Moving averages are converging, suggesting indecision in the market. The stock is trading near its S1 support level of 113.084, with resistance at 119.524. Overall, the technical indicators do not provide a strong buy signal.
Dell reported record AI server orders in fiscal Q3 2026 with an $18.4 billion backlog.
Major hyperscalers and Alphabet are planning significant capital expenditures in AI infrastructure, which could benefit Dell's server business.
Revenue, net income, and EPS showed strong YoY growth in Q3 2026, with net income up 31.74% and EPS up 39.02%.
The stock dropped 9.13% during regular trading and 5.28% pre-market, reflecting cautious sentiment ahead of earnings.
Analysts have mixed views, with some downgrades citing memory exposure risks and cautious IT hardware demand.
Insiders are selling, with a 114.23% increase in selling activity over the last month.
Rising memory costs and commodity inflation could pressure margins in the near term.
In Q3 2026, Dell's revenue increased by 10.83% YoY to $27.005 billion. Net income rose 31.74% YoY to $1.548 billion, and EPS grew by 39.02% YoY to $2.28. However, gross margin dropped by 5.86% YoY to 20.71%, indicating some cost pressures.
Analyst sentiment is mixed. While some firms like Citi and BofA maintain Buy ratings with high price targets (e.g., $165 and $163), others like Morgan Stanley remain cautious, citing slow hardware budget growth and memory exposure risks. Recent upgrades (e.g., BWG Global) highlight AI-related opportunities, but overall sentiment leans defensive.
