Dell Technologies (NYSE:DELL) reported solid fourth-quarter (Q4) earnings for fiscal 2025, with revenue slightly below expectations but earnings per share (EPS) beating estimates. The company’s ability to expand revenue while effectively managing costs contributed to record-high EPS of $8.14 and strong cash flow of $4.5 billion.

Despite economic uncertainties, Dell stock remains a compelling investment due to its strong position in AI, traditional server markets, and storage solutions. Here are four reasons why investors should consider Dell stock after its latest earnings report.

AI Growth Positions Dell for Long-Term Success

One of the standout factors driving Dell stock is its expansion in artificial intelligence (AI) solutions. Dell has successfully positioned itself as a critical player in AI infrastructure, providing high-performance servers, storage, and computing solutions that enterprises need to implement AI-driven applications.

In Q4, Dell’s AI-related orders totaled $1.7 billion, with shipments reaching $2.1 billion and an AI backlog of $4.1 billion. As businesses continue integrating AI into their operations, Dell’s AI pipeline is expected to grow, reinforcing its competitive advantage.

The company’s strategic partnerships are further strengthening its AI presence. Dell’s collaboration with xAI, an artificial intelligence research company, enhances its market positioning. Additionally, its AI-powered PowerEdge XE9680 server continues to experience strong demand, expanding Dell’s market share in AI-driven enterprise computing.

Traditional Server Market Remains a Key Growth Driver

While AI is a major focus, Dell’s traditional server business remains a reliable growth segment. The company reported double-digit revenue growth in its 16G server lineup for the fifth consecutive quarter, benefiting from increased demand for more efficient and high-performance computing solutions.

Enterprises are increasingly investing in servers that offer better power efficiency and scalability, and Dell’s product lineup is well-suited to meet these needs. The strong growth in this segment reflects Dell’s ability to maintain its dominance in core infrastructure markets while expanding into emerging AI opportunities.

Storage Solutions Continue to Deliver Profits

Dell’s storage business is another factor supporting Dell stock as a strong investment. The company has achieved four consecutive quarters of growth in its PowerStore midrange storage solutions, with three of those quarters delivering double-digit gains.

Additionally, Dell’s PowerScale and PowerFlex storage platforms are seeing strong adoption as businesses transition to more scalable, disaggregated storage architectures. This sustained growth in Dell’s proprietary storage offerings signals continued demand, further strengthening its revenue base.

Client Solutions Group Rebounds with Market Recovery

Dell’s Client Solutions Group (CSG), which includes PCs and workstations, is also showing signs of recovery. The company reported a 5% year-over-year increase in commercial revenue, marking two consecutive quarters of annual growth.

A significant driver behind this resurgence is demand from small and medium businesses (SMBs), often considered an early indicator of broader economic recovery. Dell also sees strong demand for AI-enabled PCs, with customers delaying upgrades in anticipation of next-generation AI-powered devices. This could result in a wave of new PC purchases in the coming quarters, supporting further growth.

Bottom Line: Why Dell Stock Is a Strong Buy

Dell stock remains a top contender in the evolving tech landscape. With leadership in AI infrastructure, a dominant presence in traditional servers, and a growing storage market, the company is well-positioned for future expansion.

Looking ahead, Dell expects its Infrastructure Solutions Group (ISG) to grow in the high teens, fueled by an estimated $15 billion in AI server shipments and continued demand for storage and traditional servers. Meanwhile, CSG growth is projected in the low- to mid-single digits, with strong momentum in AI-powered PCs.

As enterprises increasingly adopt AI technologies and refresh their computing infrastructure, Dell stands to benefit from these ongoing trends. Wall Street analysts remain optimistic, with a “Strong Buy” consensus rating on Dell stock due to its expanding market opportunities and solid financial performance.

Investors looking for exposure to AI, enterprise infrastructure, and storage solutions should consider Dell stock as a strong long-term investment.

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