Investing

Dell Is An Arms Dealer In The Ultimate Arms Race, and Is a Strong Buy After This Selloff

Austin Smith

Published: March 16, 2025 7:59 am

24/7 Wall St. Key Points:

• Dell (NYSE: DELL) is projected to generate $15 billion in AI server sales this year, making it a strong contender in the AI infrastructure space.
• Unlike software-driven AI companies, Dell profits from selling the physical hardware—critical servers needed to power AI applications—which positions it as a key supplier in the industry.
• With a price target near $200 and current trading levels around $90, Dell appears undervalued, offering potential upside as demand for AI infrastructure accelerates.
• Nvidia (Nasdaq: NVDA) has started to show some cracks, but even $1,000 in ‘The Next Nvidia Stocks’ could mean life changing wealth. The recent pull back may be the best opportunity to load up investors will get. Click here to see the stocks now (it’s free).

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Transcript:

[00:00:04] Doug McIntyre: One of the stocks I think people really have to took, take a look at, a hard look at in, in the sort of early evolution of AI is Dell.

[00:00:14] Lee Jackson: I think you’re right. I was looking at Dell the other day and, and the company that we was following it, you know, had a price target that was almost near 200.

[00:00:22] Lee Jackson: And I looked at the stock and it was like 90 bucks. And I think it’s a huge good tech buy for those that, you know, especially now with everything getting hit hard, you may want to take a look because they’ve announced that they could have 15 billion in AI server sales this year alone. And that is just gigantic for that company and combine all their other business.

[00:00:46] Lee Jackson: And I think, I think it’s a really good stock for people to look at at current trading levels. I mean, it could go down a little more if the market continues to go down, but boy, it’s certainly not overpriced. And I think it’s a company that’s super well run. Remember years ago, they bought EMC, the big storage guys, and they kind of molded that into what became Dell technologies, you know, that was taken private for a while.

[00:01:09] Lee Jackson: But now it’s back as Dell Technologies, it looks good, I think, at these levels.

[00:01:14] Doug McIntyre: Yeah. If I were an investor, I’d take AI driven stocks and break them into two pieces, okay? There’s Google (NASDAQ: GOOG) with Gemini. It’s a software application, they bundle it with their products. For all I know, they don’t get paid a dime for it.

[00:01:31] Doug McIntyre: It’s an enhancement or it helps build loyalty. And then there’s Dell. Dell is selling something. You know, it’s a hard product. Yeah, if you want to run AI applications, you’ve got to have these kinds of servers to me. These guys are gun merchants in the AI war

[00:01:48] Lee Jackson: I think Michael Dell will probably dispute that but yeah, you’re exactly right

[00:01:53] Doug McIntyre: But you always this is true in any industry buy the gun merchants Their stuff is needed whenever there’s a war.

[00:02:00] Doug McIntyre: You’ve got a massive AI war going on who? Elon musk apparently has his his server farm installation outside of Memphis is like the size of the district of Columbia. All of these companies are in races to build these things. And I love Dell because of that. Yeah. People look at Dell and they say, Hey, Call the guys at Dell up.

[00:02:23] Doug McIntyre: We need more of these servers.

[00:02:24] Lee Jackson: Yep. Yep. And you know, Michael Dell, it’s interesting. I’m when I first started in this business, I was in Austin, Texas and I kind of built my business on Dell back in 91 and 92. But the one thing they always did, they always made good products. And if the products If anything was bad and it blew up, they would say, just put it in the can and we’ll start over.

[00:02:49] Lee Jackson: And I think that kind of reliability in Dell products is what helps drive this server sales because 15 billion, it’s gigantic just on one silo in your company.

[00:03:01] Doug McIntyre: If you’re going to invest, look for the person selling the weapons, not necessarily the people using them.

[00:03:08] Lee Jackson: And I don’t think that demand is going to go down.

[00:03:11] Lee Jackson: You know, and it’s not like they can’t sell them all over the world, you know, it’s not like a chip to China or something like that.