Could Dell’s (DELL) Latest AI Partnership Reveal a Shifting Long-Term Strategy in Enterprise Solutions?

• Digital Realty recently announced a strategic collaboration with Dell Technologies and DXC to streamline enterprise AI deployments and accelerate outcomes by integrating Dell's AI Factory with Digital Realty's data center platform and DXC's end-to-end management services.
• This collaboration aims to deliver secure, scalable private AI infrastructure and a library of validated use cases, highlighting Dell's expanding influence in enterprise AI solutions for organizations worldwide.
• We'll assess how Dell's focus on AI-ready infrastructure and managed private AI solutions could reshape its investment narrative going forward.

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Dell Technologies Investment Narrative Recap

To be a shareholder in Dell Technologies today, you need to believe in its ability to lead the enterprise shift to AI-ready infrastructure while managing margin headwinds from legacy hardware segments. The recent collaboration with Digital Realty and DXC Technology adds momentum to Dell's push in enterprise AI but isn't likely to immediately change the biggest short-term catalyst, AI server revenue growth, or relieve the major risk of margin dilution as AI sales scale up. Among recent announcements, the launch of the PowerEdge XR8720t server stands out. This AI-ready solution targets cloud and edge computing bottlenecks, supporting Dell's effort to improve revenue mix and long-term profitability, which ties directly to the current focus on AI infrastructure as the next growth engine. However, what investors should be aware of is that, despite AI-driven topline gains, new AI server growth remains margin dilutive in the near term...

Read the full narrative on Dell Technologies (it's free!)

Dell Technologies' outlook anticipates $122.2 billion in revenue and $7.4 billion in earnings by 2028. Achieving this target implies 6.4% annual revenue growth and a $2.6 billion earnings increase from current earnings of $4.8 billion.

Uncover how Dell Technologies' forecasts yield a $150.09 fair value, in line with its current price.

Exploring Other Perspectives

Twenty-three members of the Simply Wall St Community estimate Dell’s fair value from as low as US$102.13 to as high as US$195.49 per share. As Dell expands its enterprise AI footprint, you may want to weigh both the wide valuation spread and ongoing questions about margins when considering your next move.

Explore 23 other fair value estimates on Dell Technologies - why the stock might be worth as much as 33% more than the current price!

Build Your Own Dell Technologies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Dell Technologies research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Dell Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Dell Technologies' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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