Everything Money on $DELL (Oct 31, 2026)

Then we will put the “buy the dip” strategy to a real test with three big names whose shares have declined. Google, Meta, and Dell.

So, let's put that into practice now. Let's take these three companies that have declined as spending on artificial intelligence has piled up – Google, Meta, and Dell – and discover their true value.

Now, stock number three , Dell Inc. Guys, let's look at the up and down predictions for Dell. While we wait for that, let's review some numbers. A company with a market value of $320 billion.

Now, folks, this company has an institutional value of $437 billion. This $115 billion is their debt. This is a large amount of debt. When your free cash flow for last year was $10 billion, you are looking at 11.5 times last year's free cash flow. This is extremely high.

Next, huge returns on capital, though. This is wonderful. Significant revenue growth rate. This is wonderful. Their profit margin. Look at this. Profit margin for 10 years, 3%.

Profit margin for 5 years, 5%. One year's profit margin is 7.5 %. So, they are not large numbers, but they are growing , and that is an important thing to remember. It is sold at a price of 33 times free cash flow and 28 times earnings .

Now, let's review our predictions for the rise and fall. In the first upward scenario, the demand for AI servers translates into larger orders and higher directives for the company.

Number two, it appears that growth extends beyond artificial intelligence servers. This is the great thing. Guys, they've been in the server business for a very long time, and they've been dominant for a very long time .

Number three, Dell is building an enterprise AI offering, not just selling hardware. So, the hardware is great, but when you provide the software, the business has a much higher profit margin.

When we talk about improving the low margins here, that will be a big boost to their net profit margin.

What are the conditions of descent? Growth forecasts are vulnerable to AI infrastructure spending. So, guys, we've always said this. If spending on artificial intelligence infrastructure suddenly stops , what will happen?

Just like when they were laying fiber optic cables around the world and suddenly it slowed down completely, that was a problem.

Number two, rapid sales growth does not in itself prove to be an attractive and sustainable economic. That's right , because again, we only have a gross profit margin of 20%. Remember, Google was 60% and Meta was 80%.

Here the percentage is 20%. That's not much. This is worrying.

And three, the available evidence leaves the exposure to implementation and the supply chain unresolved. Dell's growth depends on delivering complex systems built around sophisticated components.

The more complex you make it, the more likely problems are to occur.

Okay, guys, let's take a look at the eight pillars. Well, they are buying back the shares. This means they believe the stock is cheap. Capital returns are huge, net income is high, and revenues are increasing.

Guys, their cash flow is low, but that could be due to spending on artificial intelligence, so I'm not worried about that.

That religion I was talking about, that's the big number here, guys. It's similar to Oracle's situation, only worse, but this debt figure really worries me. Of course, evaluating 60 times earnings and cash flows for five years is a difficult task.

But I want to remind everyone that their profits are constantly improving, from 3 % over the past ten years to 5% for the past five years and 7.5% last year.

So , let's see what the analysts think. Oh, not as attractive as I thought. 18.85 rises to 23, but look at this. This figure of 18.85 per share represents a 90% increase over last year.

But then there is a significant drop predicted by one analyst in the final year. And the same applies to revenues . 173, 200, 218, then it drops to 192. It is still a gain. So, this is where things get confusing because we've reached this point.

We need to put it into our stock analysis tool, and we have some analysts who are saying, "Ah, we don't see much growth here. So, we need to be a little conservative going forward."

So, guys, I put out revenue growth of 4, 6, and 8 percent. I set 3, 5 and 7 for the profit margin. I will actually change this. I will give them a little bit of good faith. I would go with 4, 6.5 and 9.

Now, I don't know if that's right or wrong, but when I see an increasing profit margin, and they add software to it, I think that software is a very high-margin business. This could easily exceed these figures.

I would understand if someone put 4, 8 and 12, or something like that. That won't make me wonder, "What are you doing?" Is this possible? I do n't know, but it's heading in that direction.

Next, what is the price-to-earnings (P/E) ratio that I will put here? Now, folks, these returns on capital are fantastic and getting better. But here lies my problem with the company.

That religion. That religion really bothers me. I still give them a bonus, 16, 22 at the top, and 19 in the middle, but I feel a bit apprehensive about it. Guys, I want a bigger safety margin in this job.

I put in 9.5 percent as I said, for video and educational purposes.

Click the analyze button. So, guys, I have a low price of 150, a high price of 575, and an average price of 322, which shows a return of 4.25% based on my average assumption. So, with debt and price versus value, it probably doesn't make sense to me, but you might have something different to think about.