Dell Poised to Benefit from AI Boom at More Reasonable Valuation than Nvidia
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Nvidia stock has surged recently due to high demand for its GPUs for AI, but its valuations now look expensive. Dell could be a cheaper way to invest in the AI boom.
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Dell sells servers optimized for AI that are seeing strong demand. Its backlog of AI server orders grew 40% last quarter.
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Dell expects AI to drive a rebound in its PC business. AI-enabled PCs are forecast to take off, which benefits Dell as a top PC manufacturer.
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Analysts have been raising Dell's revenue growth estimates thanks to its exposure to hot areas like AI servers and PCs.
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Dell stock trades at reasonable valuations despite these growth catalysts. Its forward P/E of 15.7 compares favorably to the Nasdaq-100's 27.