To The Moon

$Dell Technologies Inc.(DELL)$

Dell Technologies (stock code: DELL) will release its financial results for the fourth quarter of fiscal year 2026 (Q4 FY26) and the full fiscal year after the U.S. stock market closes today (February 26, 2026).

Dell Technologies (DELL) is at a pivotal crossroads, evolving from a traditional PC giant into a core titan of AI infrastructure. As the company prepares to report its Q4 and full-year Fiscal 2026 results tonight, all eyes are on whether its massive AI backlog is finally translating into bottom-line profits. While the stock has seen a period of valuation consolidation recently (down ~5% YTD), its underlying fundamentals suggest a compelling "Growth at a Reasonable Price" (GARP) story.

I. Q3 Retrospective: The ISG Growth Engine

To understand the stakes for tonight, we must look at the record-breaking Q3 FY26 performance:

• Revenue: Reached $27.0B, up 11% YoY, marking the 7th consecutive quarter of positive growth.

• Infrastructure Power: The ISG (Infrastructure Solutions Group) surged 24% to $14.1B.

• Server Dominance: Servers and Networking revenue spiked 37% YoY, driven by relentless demand for AI-optimized clusters.

II. The AI Thesis: From Backlog to Billions

DELL’s narrative is currently anchored by its historic AI pipeline:

• Order Momentum: Q3 saw a staggering $12.3B in AI server orders, bringing the year-to-date total to $30B.

• The "Golden" Backlog: Exiting Q3, the AI backlog stood at a record $18.4B.

• Market Tailwind: With the AI infrastructure market projected to expand at a 25.7% CAGR, DELL is positioned as a primary beneficiary.

The Big Question for Tonight: Can DELL hit its Q4 AI shipment target of $9.4B? Success here would prove their execution capability despite global supply chain bottlenecks for next-gen chips like NVIDIA's Blackwell.

III. Three Critical "Watch Items" for Investors

1. Margin Integrity: Management guided for a Q4 EPS of $3.50. However, with memory costs (DRAM/NAND) rising, investors will scrutinize whether DELL can maintain its 12.4% ISG operating margin.

2. CSG Recovery (PC Segment): While Commercial PCs have grown for five straight quarters, Consumer demand remains soft (-7% in Q3). Look for signs that the "AI PC" refresh cycle is finally gaining mainstream traction.

3. FY2027 Guidance: A bullish outlook for the next fiscal year—specifically double-digit revenue growth and margin expansion—could serve as a major catalyst for a stock breakout.

IV. Valuation: The "AI Value" Play

Compared to its peers, DELL remains significantly undervalued relative to its growth profile.

Dell's current price-to-sales ratio (P/S) is only 0.78 times, significantly lower than the average level of 1.99 times among its peers such as HP (HPQ) and IBM. However, its revenue growth performance is more prominent - its revenue grew by 10.79% year-on-year in the past year, higher than the industry average growth rate of 5.42%, and the future revenue growth rate will even reach 12.22%, making it the only company among the three that has achieved accelerated growth. This combination of "low valuation + high growth" gives Dell strong potential for valuation recovery.

💡 Risk Note

Keep a close watch on component inflation. While DELL's scale offers some pricing power, a lag in passing costs to customers could temporarily squeeze margins, even if revenue beats expectations.

The Bottom Line: DELL offers a unique combination of "Value + High Growth." For long-term investors, the current valuation compression may represent a strategic entry point into the AI infrastructure super-cycle.

The above is only personal investment observation and does not constitute any investment advice.