Dell’s AI Server Share Gains Keep PC Headwinds At Bay – For Now

Summary:

• Dell Technologies is experiencing strong growth in AI server shipments, with revenues expected to grow ~9% this year, despite challenges in its PC segment.
• Management has upgraded the company’s AI market opportunity to a 22% CAGR, with ISG revenues growing robustly, particularly in Servers & Networking.
• Dell’s PC segment remains a drag, but potential PC refresh cycles in 2025 could alleviate this, supporting overall growth and margin improvements.
• I maintain a Buy rating on Dell, expecting continued growth in ISG and potential valuation premium expansion, despite some caution due to PC segment headwinds.

Investment Thesis

Dell Technologies (NYSE:DELL) has had the wind in its back this year with the server infrastructure company shipping record volumes of AI servers to satiate demand.

Revenues for the company are set to grow ~9% this year as

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